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What is an example of claiming exempt property in Chapter 13?

There are many reasons that Chattanooga resident's financial situations could fall into disarray. Unexpected expenses like medical expenses, loss of a job or other unexpected expenses can send finances into uncharted territory. There is a way to reconcile all of the debt one may have accumulated. Chapter 13 bankruptcy can reorganize assets and liabilities in order to get one's financial situation into a better place.

One aspect of the Chapter 13 process to think about and to take into consideration is the way exemptions can affect the process and be beneficial for bankruptcy filers. The intent of Chapter 13 is to repay debt under a several year repayment plan that consolidates debts with intent to pay them back. It does not, generally, take assets and liquidate them to cover debts. Because of this, often property of the debtor remains the debtor's property.

Exemptions are applied to property or assets that are to be kept safe from creditors. By properly claiming exempt property, a person filing for bankruptcy can protect assets that are most important to them. For example, a home is usually an asset people would like to protect from creditors. Claiming the house as an exemption is one way to protect this asset during a bankruptcy.

There are different types of bankruptcy that achieve different goals. Chapter 13 may not be right for every person filing for bankruptcy. There are other options if looking to deal with a less-than-favorable financial situation. Those suffering under the stress of debt do have options to get finances back in a positive light.

Source: bankruptcy.findlaw.com, "Exempt Property in Chapter 13 Bankruptcy," Accessed February 27, 2017

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

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