Michigan Bankruptcy Exemptions
One of the biggest myths about bankruptcy that continues to resonate is that you will lose everything if you file for bankruptcy. Quite simply, that is NOT TRUE. Most of our clients are able to keep all of their property because the United States Bankruptcy Code provides for exemptions. Exemptions allow you to protect a certain amount of equity in an asset. There are state bankruptcy exemptions and federal bankruptcy exemptions that allow the filer to exempt different amounts of equity in different assets. However, you can’t use both state and federal exemptions so it’s essential to pick the proper one.
Keeping your stuff in Chapter 7
A Chapter 7 bankruptcy is also commonly referred to as bankruptcy liquidation. This means the bankruptcy trustee is looking to sell off assets in order to pay your creditors. However, the trustee cannot sell any property you are able to exempt. Our office will determine which exemptions to use in order to ensure you keep most, if not all, of your property!
Keeping your stuff in Chapter 13
Chapter 13 bankruptcy allows you to keep all your property and reorganize your debts into a payment plan. Exemptions are still very important in a Chapter 13 bankruptcy because of the liquidation test. The liquidation test requires that unsecured creditors be paid as much as they would have received if all the property was liquidated. By using the proper exemptions we will be able to keep your payment plan as low as possible.
Bankruptcy exemptions in Chapter 7 and Chapter 13 bankruptcy are very important. Selecting the correct exemption for your assets can also become complicated. It is important to hire an experienced bankruptcy attorney to make sure your assets are protected to the fullest extent possible. Call us today at 248.237.7979 to make sure the proper bankruptcy exemptions are used on your case!