Filing for bankruptcy can be a way to find relief from financial woes and stress. Determining whether filing Chapter 7 is right for you can help you to navigate the process of resetting or selling off additional assets that you currently own to help alleviate financial strain. If you are living in Maryland, understanding the exempt and nonexempt assets in Chapter 7 bankruptcy can help you to determine if this type is right for you.
What is a nonexempt asset in Chapter 7?
When filing for bankruptcy, defining a nonexempt asset is essential, especially if you are required to sell or liquidate assets in order to pay back debts that you owe. A nonexempt asset when filing Chapter 7 bankruptcy may include additional homes that are vacation or rental homes, additional vehicles that are not your primary modes of transportation, expensive coins and collectibles, stamps and statues, expensive musical instruments and other non-essential investments.
What is an exempt asset in Chapter 7 bankruptcy
An exempt asset when dealing with Chapter 7 bankruptcy includes your primary home as well as your primary vehicle or chosen mode of transportation. In Maryland, the District of Columbia allows individuals to choose between the state and federal exemption system to provide more options and flexibility during a bankruptcy case. Under current federal law, the following assets and amounts are protected:
– $25,150 of equity in your current primary residence
– $1,700 for owned jewelry
– $4,000 for your current vehicle
– $625 for appliances and other major household items or pieces of furniture
– $13,400 of loan value or other insurance policies and accrued dividends
Filing for bankruptcy does not have to turn your entire world upside down, especially if you are working with a legal representative who understands your options. When it comes to filing Chapter 7 bankruptcy, having a legal team by your side may help to streamline the process without sacrificing assets that are most important and valuable to you.