Under the Bankruptcy Code, every debtor is allowed to keep a certain amount of property, no matter how much he or she owes. The property which a person may keep is called “exempt,” and the provisions which allow a person to keep certain property are called “exemptions.” (However, please note that even if your house and car are “exempt,” your mortgage company can still foreclose and your finance company can still repossess if you don’t pay for your car or house.) In Arkansas, a debtor filing bankruptcy may choose between the exemptions allowed by Arkansas law or those permitted by Federal law. For many debtors the Federal exemptions will allow them to protect a good bit of their “stuff.”
For example, under current federal exemptions, a debtor may keep:
Your equity in your home of up to $22,975.00.
Your interest in a vehicle of up to $3,675.00.
Your total household furnishings of up to $11,525.00, with no more than $550.00 in any one item.
Your jewelry worth up to $1,550.00
$1,225.00 in any property, plus up to $11,500.00 in the unused part of the equity in one’s home. (This means you could possibly exempt the sum of $3,675.00 + $11,500.00, or $15,175.00, in your interest in a vehicle).
The vast majority of people who file Chapter 7 bankruptcy do not have to give up any property in order to do so. If you have any questions about whether Chapter 7 Bankruptcy is right for you (or Chapter 13, for that matter), please call me to discuss your situation at 501-604-4525. There is no obligation, and the call is free.