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Oakland Bankruptcy Attorney Can Explain Property Exemptions

One of the factors to consider when learning about which bankruptcy process may be right for you and your family is the type of assets you possess and whether they are considered exempt or nonexempt under the law. Your California bankruptcy attorney can examine your assets and help you determine how to proceed.


Chapter 13 and Chapter 7: Which is Right for Your Situation?

The two primary ways of filing personal bankruptcy are Chapter 7 and Chapter 13. When people have regular income and substantial assets they would like to keep despite filing bankruptcy, they typically file Chapter 13 bankruptcy, since it often allows debtors to maintain their property and assets such as their homes – and the equity therein – throughout the process, which can take several years.


Chapter 7 bankruptcy, however, does not provide the same safeguard for debtors’ property, though it has other benefits, such as discharging unsecured debt. Instead, the bankruptcy trustee may sell off some nonexempt assets in order to pay down  the debts.


For this reason, people who choose Chapter 7 proceedings typically do not own substantial property beyond what is necessary for day-to-day living. Chapter 7 filers generally do not have much income either, since a higher income level could require a person to file Chapter 13 instead.


Exempt and Nonexempt Assets

Chapter 7 bankruptcy is often referred to as a total liquidation of assets, since nonexempt assets are sold to reimburse creditors to whatever degree possible. When a debtor has no assets that are eligible to be liquidated though, the lenders often receive nothing and will simply have to take the loss. In contrast, this can make Chapter 7 proceedings quite attractive for debtors who do not have much to lose in terms of nonexempt assets.


The Role of Exemptions in Chapter 7 and Chapter 13 Bankruptcies

While property exemptions can be used to protect a debtor’s property from being sold to pay creditors in Chapter 7 bankruptcy proceedings, exemptions also play a role in Chapter 13 bankruptcies – by helping determine the type, amount and schedule of creditor repayment obligations.


Which Assets are Exempt?

In California, the law mandates that the state exemptions take precedent over the federal exemptions, and debtors are allowed to choose from two systems of exemptions, depending on the valuation limits allowed for different assets. A few exemptions have no monetary caps and are simply exempt outright.


Some of the exemptions allowed in California protect, up to a certain amount:


  •         Home equity,
  •         Motor vehicle equity,
  •         General household goods,
  •         Clothing,
  •         Jewelry,
  •         Artwork,
  •         Appliances,
  •         Heirlooms,
  •         Personal injury awards,
  •         Certain wages paid before filing,
  •         Pre-paid cemetery plots,
  •         Some social security payments,
  •         Veteran’s benefits
  •         Health care aid,
  •         Certain retirement accounts,
  •         Pensions,
  •         Public aid program payments,
  •         Tools of your trade,
  •         Some life insurance benefits,
  •         Business property,
  •         Alimony and child support.


Consult an Experienced Personal Bankruptcy Attorney in Oakland

No matter your situation, your bankruptcy lawyer with the Law Office of Melanie Tavare in the Bay area can help you decide whether either Chapter 7 or Chapter 13 bankruptcy filing is right for you and, if so, which system of property exemptions would best protect your interests – and your property.


"Melanie is the best she very responsive and helpful throughout the process everything was taken care of smoothly. If you are thinking of going through bankruptcy she is the best attorney for you. I will forever be grateful having the chance to work with her. She is very honest too."


"I can't thank Melanie enough for helping me through a challenging process and doing so with incredible knowledge, professionalism and tenacity! She went to great lengths to keep me informed, she responded quickly to my questions, and communicated in terms that I could understand. I highly recommend getting in touch with Melanie should you have the need."


"Choosing to work with Atty. Melanie has been one of the best decisions I've ever made. She was a very patient professional to work with and attentive while providing valuable solutions to all of my concerns. If you are searching for of an Attorney who is knowledgeable, transparent, and diligent - well that's Atty. Melanie."


"What I liked about working with Melanie was how prompt and easy to work with she was. She made the process clear and understandable with as little stress as possible. I would work with her again and recommend her to others."