Boston Bankruptcy Attorney
Exempt and Non-Exempt Property
After an individual or company decides to file for liquidation bankruptcy, any non-exempt property will be sold to earn money with which to pay back creditors. Knowing the difference between exempt and non-exempt property is pertinent when filing for Chapter 7 bankruptcy, so you will not be surprised when certain items that may hold personal significance are taken away from you.
Exempt Property
Exempt property is a phrase used to describe possessions that cannot be taken away from an individual when he or she has filed for Chapter 7 bankruptcy. It includes items that are mostly necessary for an individual or family to survive comfortably. Examples of exempt property include the following:
- Homestead property (this includes a certain amount of equity in one’s place of residence)
- A motor vehicle that is valued at a relatively low amount of money
- A certain amount of jewelry
- A reasonable amount of clothing
- A certain number of home furnishings
- Tools of one’s profession or trade
- Household pets
- Certain home appliances
- Some heirlooms
- Public benefits, such as social security or welfare
- Personal injury damages
As you can see, many unnecessary items are not included on the above list. Those possessions are considered to be non-exempt property, and are subject to liquidation.
Non-Exempt Property
Non-exempt property includes high-value assets that are not necessary to sustain one’s well-being. Examples of non-exempt property include the following items:
- Second homes
- Second motor vehicles
- Expensive musical equipment, including instruments and electronics
- Most heirlooms, particularly those of high worth
- Any collection that may be worth a significant amount of money (stamps, coins)
Contact Us
If you are thinking about filing for Chapter 7 bankruptcy and would like to learn more about categorizing your assets into exempt and non-exempt property, the Boston bankruptcy attorneys of Joshua Spirn & Associates can help you. Please contact our law office today at 1-800-975-5346 to set up an appointment.
