People going through bankruptcy are entitled to have an exemption on their real property, which is their home, and on their personal property, which includes their personal goods, cars, and household furnishings. The exemption for real property is $15,000 for a single individual. That number doubles to $30,000 for married couples.
Looking at this from a liquidation standpoint, let’s say you have a house worth $30,000 that’s paid for, meaning you don’t owe anybody any money on it. In this scenario, nobody can touch your house. On the other hand, let’s say you have a house that’s worth $30,001. As far as the court is concerned, that one dollar over belongs to the creditors, and they want to ensure the creditor gets paid that amount.
The same principle applies to personal property. The exemption for personal property is $7,500 for an individual and $15,000 for married couples.
As you can see, exemptions can really go a long way if you’re looking at your bankruptcy case from a liquidation or auction standpoint. For more information about exemptions, liquidation, or bankruptcy in general, I encourage you to contact my law office, Jeffrey B. Irby, P.C. As a Huntsville bankruptcy attorney, I’m happy to extend my services to clients throughout Jackson County and all of northern Alabama.