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Know how Bankruptcy Exemptions can help save your assets.
AVONDALE, ARIZONA, UNITED STATES, March 29, 2023/EINPresswire.com/ — WantAFreshStart, a reputable bankruptcy law firm in Avondale that specializes in bankruptcy, DUI, and family law services, has taken a step in assisting the citizens of Avondale in finding the hidden loopholes that could save their assets through Bankruptcy Exemptions.
If you are struggling with debt, bankruptcy can seem like a scary and overwhelming prospect. However, bankruptcy can also be an effective tool for getting a fresh start and rebuilding your financial life. One important aspect of bankruptcy to understand is the concept of bankruptcy exemptions. These exemptions allow you to protect certain assets from being seized by creditors in the bankruptcy process, helping you to maintain some stability during this difficult time. But did you know that there are hidden loopholes within these exemptions that could potentially save even more of your assets? Here’s what you need to know.
First, let’s review the basics of bankruptcy exemptions. There are two types of bankruptcy that individuals can file: Chapter 7 and Chapter 13. In Chapter 7 bankruptcy, the court will liquidate your assets to pay off as much of your debt as possible, and any remaining debt will be discharged. However, there are certain assets that are protected by exemptions, which vary depending on your state of residence. Common exemptions include your primary residence, personal property (such as clothing and household goods), retirement accounts, and vehicles.
In Chapter 13 bankruptcy, you will repay a portion of your debt over a period of three to five years under a court-approved repayment plan. In this type of bankruptcy, you can keep all of your assets, but you must be able to show that you have enough income to make the required payments.
Now, let’s talk about the hidden loopholes within bankruptcy exemptions. These loopholes vary depending on your state of residence, but here are a few examples:
Using wildcard exemptions: Some states have what are called “wildcard” exemptions, which allow you to exempt a certain amount of any type of property. For example, in California, you can exempt up to $28,225 of any property using the wildcard exemption.
Using unused homestead exemptions: If you own a home and are filing for bankruptcy, you may be able to use any unused portion of your homestead exemption to protect other assets. For example, if your homestead exemption is $100,000 and your home is worth $80,000, you could use the remaining $20,000 of the exemption to protect other assets.
Timing your bankruptcy filing: If you have recently received a large sum of money, such as an inheritance or a settlement, it may be beneficial to delay filing for bankruptcy until after you have spent the money. This is because the money may not be exempt, but if you have already spent it on exempt assets, those assets will be protected.
Using federal exemptions: Some states allow you to choose between using the state exemptions or the federal exemptions. In some cases, the federal exemptions may be more generous and allow you to protect more assets.
It’s important to note that bankruptcy exemptions can be complex and vary widely depending on your state of residence. Consulting with an experienced bankruptcy attorney is the best way to ensure that you are using all available exemptions and loopholes to protect your assets. With the right strategy, bankruptcy can be a powerful tool for getting a fresh start and rebuilding your financial life.
About WantAFreshStart:
WantAFreshStart Avondale Bankruptcy Lawyers is a law firm located in Avondale, Arizona, that specializes in bankruptcy, DUI, and family law services. Our team of experienced attorneys is dedicated to providing personalized solutions tailored to each client’s unique needs. We are committed to helping clients achieve financial freedom and stability during tough times.
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