If you’re struggling with overwhelming debt, then you’re in the company of millions of Americans. And like them, you might be worried about what your financial woes mean for your future. You might be concerned about losing your home, your car, and all of your financial resources.
Although the thought of losing everything can be soul-crushing, the good news is that there are very real debt relief options out there. Some of them, like bankruptcy, can give you the fresh financial start that you need and deserve.
Will you lose everything through bankruptcy?
Yet, a lot of people who consider pursuing bankruptcy are concerned that they’ll have to give up all of their assets before their debt obligations will be relieved. But the bankruptcy process isn’t intended to leave you destitute. Instead, the bankruptcy process seeks to give you debt relief while ensuring that you still have financial resources to support yourself.
Understanding bankruptcy exemptions
One way the bankruptcy process helps protect your financial stability is by providing you with bankruptcy exemptions. These exemptions allow you to remove certain assets from the bankruptcy process so that you can retain them once the process has played out. Although some states allow you to choose between state and federal bankruptcy exemptions. Louisiana requires you to utilize state exemptions.
So, what exemptions can you utilize?
There are a lot of bankruptcy exemptions, and many of them can be doubled if you’re filing a joint bankruptcy petition with your spouse. Keep in mind, though, that you can’t double the homestead exemption. With that in mind, here are some of the exemptions that you might be able to utilize to ensure that you have financial stability post-bankruptcy:
- Homestead exemption: By using this exemption, you can remove up to $35,000 in equity that you’ve built into your home. This can provide you with a significant amount of financial relief once your bankruptcy is finalized. However, there are some restrictions on the size of property that may qualify for the exemption, so make sure that you understand those restrictions before moving forward with your case.
- Vehicle exemption: With this exemption, you can keep up to $7,500 in equity that you’ve built up in a motor vehicle. If you have a vehicle that’s been modified to transport someone with a disability, then you can keep up to $7,500 in equity in that vehicle, too.
- Personal Property: You can also exempt up to $5,000 worth of personal property, which may include anything from clothing and appliances to jewelry. If you’re married, then you and your spouse can claim up to $10,000 through this exemption.
- Retirement plans and pensions: Many of your long-term investments, such as pensions and retirement plans pertaining to state employees, teachers, police officers, and some city workers, can be exempted from the bankruptcy process.
- Wages: A significant amount of your wages can also be excluded from the bankruptcy process.
There may be other bankruptcy exemptions that you can utilize, which is why you may want to work through your bankruptcy with an attorney who knows this area of the law and can ensure that you exploit every opportunity available to you.
Navigate your bankruptcy with confidence
We know that the thought of pursuing bankruptcy can be stressful and depressing. But this is because most people have a lot of misconceptions about what the process entails and how it can help them.
Therefore, if you’re looking for real financial relief, then you should seriously think about pursuing bankruptcy. If you successfully navigate the process, then you can shed yourself of unwanted debt while still retaining financial viability. If that’s something that you’re interested in accomplishing, then now may be the time for you to discuss bankruptcy with an attorney.