Bankruptcy exemptions

Exemptions are the legal mechanisms by which a debtor (the person filing the bankruptcy) can protect their property from their creditors.  The federal government and every state each have their own list of property that is exempt.  Some states will only let you use their list of exemptions, but some will allow you to choose between their exemptions and the federal exemptions.Exemptions determine which assets you can keep in a Chapter 7 bankruptcy.  For example, if you are single and filing for bankruptcy in a state where you are allowed to use the federal exemptions, you can exempt one car worth $3675.  This means that if the difference between the value of your car and the amount you owe on it is more than $3675, the trustee assigned to your case may be able to seize your car and sell it to pay some of your bills.Exemptions are generally grouped by category, so you can only protect certain categories of assets up to a certain dollar amount.  However, the federal exemptions and some state exemptions have what is known as a “wildcard” that will cover any assets that are not protected by any other exemption category.  If you aren’t sure you can exempt certain property, consult with a qualified local attorney to determine whether your assets can be protected before you file.