What if an investment you thought was your ticket to millions causes your downfall? Unable to pay your debts, many people and/or companies file for bankruptcy which offers them a lifeline. Your assets and liabilities are assessed by court trustees and judges to conclude whether your debts could be discharged. However, there are some bankruptcy exemptions too, which are used to determine how much property you can keep.
Category: Bankruptcy
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All You Wanted to Know About Federal Non-bankruptcy Exemptions
Apart from the choice between state and federal exemptions available for bankruptcy filers, additional exemptions in the form of federal non-bankruptcy exemptions are available. Individuals who are unable to cope with defaulting on payments and file for bankruptcy can heave a sigh of relief. People can take advantage of exemptions outside the bankruptcy code to help protect their assets when they file for bankruptcy. As these exemptions exists outside bankruptcy code, they are termed as federal non-bankruptcy exemptions. It is therefore important to have a sound understanding of the exemptions under this heading to save your property in rough times.
Difference between Bankruptcy Exemptions and Non-bankruptcy Exemptions
Exemptions, whether state or federal, bankruptcy or non-bankruptcy work for the same shared goal – preventing taking under of certain assets, so as to allow the credit defaulter to start a new life. When you avail any exemption, a certain amount of property is prevented from being sold by the bankruptcy trustee to repay your creditors. However, unlike bankruptcy exemptions, it is harder to qualify or use non-bankruptcy exemptions as you are required to belong to a specific group or part of a certain profession.
Eligibility Criteria for Federal Non-bankruptcy Exemptions
Unlike Sacramento (California), many states in U.S. allow you to choose from state and federal bankruptcy exemptions. If you wish to avail additional exemption under the federal non-bankruptcy exemption, it is important to know whether your state allows you a choice between state and federal bankruptcy exemption or not. Here’s a list of states which offer you this choice:
- Alaska,
- Arkansas,
- Connecticut,
- District of Columbia,
- Hawaii,
- Kentucky,
- Massachusetts,
- Michigan,
- Minnesota,
- New Hampshire,
- New Jersey,
- New Mexico,
- New York,
- Oregon,
- Pennsylvania,
- Rhode Island,
- Texas,
- Vermont,
- Washington, and
- Wisconsin
Apart from those mentioned above, many states allow only state exemption laws. In case you reside in them, you can avail federal non-bankruptcy exemption. This is beneficial as if you reside in one of the states which allows you a choice between state and federal bankruptcy exemption, and you choose the latter, you cannot use the federal non-bankruptcy exemption. Another factor to keep in mind is that choosing state exemption does not automatically make you eligible for federal non-bankruptcy exemption. You have to fulfil the specialised eligibility criteria if you wish to use it.
Exemptions under Federal Non-bankruptcy Exemptions
If you qualify for the federal non-bankruptcy exemption, here’s what you can save apart from state exemptions. It is important to note that unless specified in exemption, there is no dollar limit to what you can exempt.
- Retirement Benefits
If you are a veteran, civil, foreign or military service employee, railroad worker, CIA employee, a military medal of honour roll or a social security benefit recipient, your retirement benefits are entirely exempted.
- Death & Disability Benefits
If you are a harbour worker, longshoreman or a government employee, your death and disability benefits are fully exempted. If you have received any benefits for risk taken, hazards endured, injury sustained or death resulting from war, the compensation is also exempted under federal non-bankruptcy exemption
- Survivor’s Benefit
This exemption is available for people in military service, some judicial employees including judges, Supreme Court Chief Justice administrative assistants, and centre directors as well as for lighthouse workers.
- Miscellaneous Non-bankruptcy Exemptions
As per lawyers from Recovery Law Group, federal non-bankruptcy exemptions include:
- Military group life insurance
- Any deposits made by military personnel to saving accounts when on permanent duty outside U.S.
- 75% of earned but unpaid salaries or 30 times federal minimum hourly wage (whichever is more). Judges can grant more for low income debt defaulters depending on their discretion.
- Seamen’s clothing
- Klamath Indian benefits for those Indians living in Oregon
- Indian lands & their homestead lease or sale earnings
- Unemployment benefits for railroad workers
- Any debts incurred by seaman on voyages
- Wages of seaman except when used for child or spousal support
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Not Sure If You Should File Chapter 7 Or 13? Know The Difference Between Two, First
Confused about what you should file, Chapter 7 or Chapter 13? Based on your current circumstances, you may find one choice outdoes the other. Chapter 7 and Chapter 13 are no same, and carrying different potential consequences. Both, however, can help defaulters make a suitable move toward debt repayment.
Chapter 7 bankruptcy San Antonio, otherwise known as liquidation, is a legal choice that helps people discharge their debts. This also means having to capitulate some of your valuable assets, such as cars, additional properties or even cash, sometimes. (more…)
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Why Should You Always Consider An Attorney While Filing For Bankruptcy?
Chapter 13, a.k.a. ‘wage earner’s plan’ in the United States of Bankruptcy Code allows defaulters to propose a payment plan that would further enable them to give off their debts and also not sell any of their properties. Filing for Chapter 13 is one of the biggest financial decisions that further associate certain obligations and advantages. Chapter 13 bankruptcy lawyers are the only ones to find you a seamless way out of the situation. They first evaluate if you’re an eligible applicant to then help you avoid complications such as delays.
One totally has the right to do so without involving a lawyer, and if the case is uncomplicated and straightforward enough, you can save yourself the lawyer’s fees. This is, however, not a wise decision always. Let’s assume your Chapter 7 involves exorbitant assets, filing Chapter 13 without an attorney with such conditions will definitely cost you more than the fee.
Why Chapter 13 or Chapter 7 lawyers are worth the cost?
The major advantage of proceeding under the guidance of a professional attorney is that he or she will foresee if there are any potential hiccups that are likely to grow while you’re halfway through, thus plan accordingly. Below is a sample of the value, a professional bankruptcy lawyer brings to the table:
Bankruptcy planning
There are types of bankruptcy. You may not know which bankruptcy type you need to file for. Chapter 7 and Chapter 13 achieve a diverse goal, serving a totally different purpose. For example, Chapter 7 helps annihilate debts within a short window, but it does not help save your properties if you’re behind on your monthly payments. An attorney is supposed to consider your needs and constraints carefully and recommend an effective yet seamless bankruptcy filing plan, thus you can achieve your goals.
What does bankruptcy preparation involve?
Application of Means Test: This is to determine if you’re eligible for Chapter 7 bankruptcy or if you can afford Chapter 13 case. Your attorney will recognize any such special circumstance and figure out the best possible utilization of it.
Valuation of your assets: You don’t know how to value that 12 years old television set of yours or your dining room. However, an experienced attorney sure does. He or she will make sure that you divulge and value your properties persuasively.
Selection and application of exemptions: Each state in America nurtures a different exemption organism, utilized to keep an asset while in bankruptcy. An attorney knows exactly how to utilize that exemption rule, thus to protect a large portion of your properties.
Identify discharge of debts: There are certain debts that can never be wiped out in bankruptcy. Some head off only if the conditions are met. An attorney is capable of explaining which debts are likely to be discharged and which are potential to survive the case.
On top of everything, an attorney also helps you avoid bankruptcy fraud. Here’s how?
Little did you know that bankruptcy fraud is a grave crime in the United States of America. This happens to be a punishable crime by the both criminal penalties and civil penalties. If, while filing for Chapter 7/13, you don’t present all your properties, assets, fake records or information, or if you fail to fill out the bankruptcy form truthfully and completely, you are on the verge of committing a bankruptcy fraud.
An attorney will always make sure you aren’t at risk of committing any such fraud, thus avoid criminal/civil penalties. Being a professional bankruptcy attorney, he or she will always review your form and cross-verify each and every information you have given out in the form.
Chapter 7 and Chapter 13 attorneys at Recovery Law Group are easily reachable, despite being busy handling major cases from around the U.S.
Here you can schedule a free consultation with our experts https://bankruptcy.staging.recoverylawgroup.com/ or Call us on 888-297-6203.