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In a Chapter 7 bankruptcy, an individual is allowed to keep certain exempted property. There are 19 other general classes of exemptions that cannot be discharged in a Chapter 7 proceeding. They can be summarized as child support, taxes, student loans, fines and restitution imposed by a court for any crimes commited by the individual. A recent decision submitted by the Supreme Court in a particular case held that assets in Individual Retirement Accounts (IRA) are protected under 11 U.S.C and 522(D) and are thus exempted from withdrawal.
In the case of a married person in a community property state, the estate may exclude certain community property interests of the debtor's spouse, even if the spouse has not filed for bankruptcy.
The estate may include other items like property acquired by will or inheritance within 180 days of the commencement of the case. An individual debtor is allowed to choose between a "Federal List" of exemptions and the list of exemptions provided by the law of the state. However, federal law may state that only the state list may be available in that particular state. In states that allows a choice of exemptions lists, the debtor may make full use of this to his or her benefit. In some states, exempt property includes equity in a home or a car, tools of the trade and some amount of personal effects. The major purpose of bankruptcy is the orderly and reasonable management of debt. Banks and other deposit institutions, insurance companies and certain other financial institutions and entities are exempted under the bankruptcy code. Instead there are special state and federal laws that govern the liquidation and reorganization of these companies. Chapter 7 provides detailed information on Chapter 7, Chapter 13 Bankruptcy, Chapter 13 Trustee, Filing Chapter 13 and more. Chapter 7 is affiliated with Chapter 7 Bankruptcy Forms. http://www.e-chapter7bankruptcy.com/ |
