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Understanding exemptions when filing for bankruptcy

One frequent concern of many Tennessee residents who are considering filing for bankruptcy is that everything will be lost as the process moves forward. Many are unaware or lack the knowledge to understand what bankruptcy exemptions are and how they can protect certain properties. Given the inherent fear that many experience when the word "bankruptcy" is mentioned and bills have reached the point where it is a legitimate possibility, the myths that come along with it can lead to a great deal of irrational suppositions and fear. Knowing the exemptions can alleviate this hesitation.

The forms of bankruptcy that most people use - Chapter 7 and Chapter 13 - allow for some assets to be retained. With Chapter 7, a person who is filing for bankruptcy can keep a certain amount of their assets. There is a chance that all assets can be kept. With that in mind, those who are filing for bankruptcy need to realize that there are limits to this rule.

When it comes to Chapter 13, the debts will be reorganized. This allows the person filing to put the back payments for a home or auto into the repayment plan. Even those who might have fallen behind on mortgage payments or are heading toward foreclosure can keep the residence via the exemptions available. This also holds true for the vehicle and other assets.

Given the perception that bankruptcy is so drastic a step, it's easy to see why people who are in financial trouble will still try to avoid filing for bankruptcy even if it is probably the best way to get back on stronger financial footing. Bankruptcy exemptions are in place to protect the person filing. An exemption plan is an important part of the case.

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

Toll Free: 888-376-0282
Phone: 423-933-1606
Fax: 423-877-0363
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