Complete Guide to Chapter 7 Bankruptcy Exemptions

Filing for Chapter 7 bankruptcy can feel overwhelming, especially when you're worried about losing everything you own. The good news? Bankruptcy exemptions exist specifically to protect your essential assets and give you a genuine fresh start. Understanding these protections can make the difference between losing your home and keeping it, or surrendering your car versus maintaining your transportation to work.

Chapter 7 bankruptcy, commonly called liquidation bankruptcy, allows individuals and businesses to eliminate certain debts by having a trustee sell non-exempt assets to pay creditors. While this might sound alarming, the reality is that most people who file for Chapter 7 bankruptcy keep the majority of their belongings thanks to bankruptcy exemptions.

These exemptions protect necessities like household goods, clothing, vehicles, and work tools, plus certain financial assets, including retirement accounts and insurance benefits....