Getting into more debt than you can handle is a fairly common occurrence for people these days, and there is a light at the end of the tunnel even in the worst of situations. When your income is not sufficient enough to pay your debts in a timely and productive fashion, you have the option of filing for Chapter 7 bankruptcy. In the state of Alabama, the process is fairly straightforward and can even allow you to keep some of your property rather than relinquish it to pay your debts.
A Brief Introduction to Chapter 7
As mentioned above, Chapter 7 bankruptcy is appropriate for those who have too much debt for them to reasonably pay off. It takes an inventory of all of your income and assets, and for the most part completely rids you of the nagging debt you had. Some creditors are exempt from being satisfied during a Chapter 7 filing, including past due taxes and student loans, but overall you can start with a clean slate once your case has been completed.
Do I Have to Get Rid of Everything?
Many times during Chapter 7 bankruptcy you will be asked to give up your personal property in order to offset your debt. Items like your clothing or housewares aren’t included, but in some states your home or even your car can be taken.
In Alabama, there are specific stipulations that discuss what types of items are exempt during a Chapter 7 bankruptcy case. While the list is long and detailed, we are going to provide an overview of the types of items you’ll be able to keep:
- Your home and property, valued up to $15,000. The size of your property cannot exceed 160 acres.
- Disability and life insurance compensation.
- Personal items like family pictures, books, or a burial plot.
- A variety of pensions and retirement accounts.
- 75% of weekly net income; it can be more for certain low income individuals.
- Tools required to be kept by military personnel.
- Unemployment and worker’s compensation payments.
- An additional $7,500 in personal property of your choosing.
When the above property and payments are exempt, they are essentially protected during the bankruptcy process. You do not have to worry about any of these items being taken from you or sold to satisfy any of your creditors.
If you are considering filing for Chapter 7 bankruptcy and have questions regarding your property and what you’re allowed to keep, contact Bankruptcy Solutions today.