If you file for bankruptcy, some of your assets may be liquidated in an effort to pay down existing debt balances. However, certain types of property may be exempt from being liquidated or otherwise taken from you. For instance, federal law says that you can keep up to $25,150 of positive equity in your California home. You may want to take a look at some other items that could remain in your possession during a bankruptcy proceeding.
Equity in a vehicle may be exempt
You’re allowed to retain up to $4,000 of positive equity in your vehicle. If you are filing for bankruptcy with a spouse, he or she is also allowed to take advantage of this exemption. Furthermore, a trustee may allow you to retain ownership of a car, truck or van if repossessing it would cause a significant hardship.
Benefits may be exempt in a bankruptcy case
Generally speaking, you can keep 100% of any unemployment, disability or other public assistance payment that you receive after filing for bankruptcy. It may also be possible to retain a portion of alimony payments as well as a portion of any payments received from a life insurance policy. Finally, up to $25,150 in compensation obtained in a personal injury lawsuit may be exempt. Your attorney may provide more insight into the types of bankruptcy exemptions that might be available in your case.
If you are struggling to keep up with your existing debts, it may be a good idea to file for bankruptcy. Doing so may allow you to eliminate your current balances without losing all of your property. A legal professional may be able to provide more information as to the other potential benefits of filing for protection from creditors.