People under huge debts are often unaware of whether they can protect their house or any other asset when they file for bankruptcy. Most states allow Chapter 7 bankruptcy filers to protect some or all equity in their home. This is termed as a homestead exemption. This exemption is also available in the case of Chapter 13 too. As per Los Angeles based bankruptcy law firm Recovery Law Group if you are able to get all or most of your home equity exempted, this lowers the minimum amount you need to pay your unsecured creditors. This makes your repayment plan considerably affordable. However, the homestead exemptions vary in each state. Few examples include:
- Some states allow exemptions of all home equity, irrespective of the size of the home; while others protect only a small amount of equity.
- Few states allow married couples (who are filing for bankruptcy jointly) to double the homestead exemptions.
- Some states require debtors to file homestead declaration if they wish to take advantage of homestead exemptions in bankruptcy.
- Most states allow you to use the state homestead exemption, while a few allow you the choice between federal and state homestead exemption.
If you wish to know more about the homestead exemption in your state, it is important to consult an experienced bankruptcy attorney. Call 888-297-6023 to discuss your case and get to know what type of property and to which amount you can have exempted using homestead exemption.