California residents who find themselves in a difficult financial situation often feel overburdened and in need of a fresh start. For some, a bankruptcy filing may be a viable solution to their financial problems, but understandably, they may have concerns as to what will happen to their personal property if a bankruptcy proceeding is pursued. In some cases, bankruptcy exemption laws can be applied for to help protect some of their personal property.
A Chapter 7 filing is one of the most common forms of bankruptcy. This type of filing is generally considered a liquidation bankruptcy and is popular for its ability to discharge debts outright -- if approved by a Bankruptcy Court. This ability to be free of debts grants filers the ability to start over, but few want to start over completely from scratch -- if they can avoid it -- and want to be able to keep some of their personal property.
Bankruptcy exemptions are in place to allow filers the ability to keep things like their home, car or other personal belongings -- if they meet certain qualifications. While some states offer a choice between state or federal exemptions, California requires filers to use the state specific exemption systems. Some of the exemptions available to California residents include:
- Homestead exemptions
- Automobile exemptions
- Personal property exemptions
- Wildcard exemptions
Certain specifications are involved in qualifying for these exemptions, and the amount of debts owed and the value of the property in question are also taken into consideration before exemptions are approved. While it is important to know what exemptions are available, understanding how these bankruptcy exemption laws apply to each individual situation can be somewhat complicated to figure out. Help is available to gain clarification on exemption laws and how they can be applied to a Chapter 7 filing.
Source: FindLaw, "Bankruptcy Exemptions: Chapter 7", , Sept. 3, 2014