Exemptions in Bankruptcy
Are you feeling burdened by your debt? In search of a solution to improve your finances and put you on the right path for a financially successful future? If so, filing Chapter 7 or Chapter 13 bankruptcy might be for you! Our legal professionals at E. Orum Young Law Offices are here to assist you and help you understand everything you need to know: from bankruptcy basics to bankruptcy exemptions, down to the filing process and even post-bankruptcy scenarios.
If you’re filing for bankruptcy in the state of Louisiana, one of the most important things you need to understand is how both Chapter 7 and Chapter 13 bankruptcy work and what bankruptcy exemptions you are allowed.
Exempt Assets in Chapter 7 Bankruptcy
Chapter 7 bankruptcy involves having a court-appointed trustee sell your assets to pay off your creditors. The state separates assets into two categories: exempt and nonexempt. The debtor must list all non-exempt assets for the trustee to appraise and sell. Failure to do so can result in a court-issued search warrant. Exempt assets cannot be sold to pay debts no matter what they’re worth. By identifying exempt assets, an individual can clarify what possessions will remain after the bankruptcy process.
While there are nationally-recognized exempt assets, they vary from state to state. An individual pursuing bankruptcy has the choice to either follow the state or national ramifications for their particular claim. Married couples who file for joint bankruptcy can double all Louisiana exemptions except for real estate.
The most common Louisiana bankruptcy exemptions are residential property, insurance benefits, vehicles, and specific private property as outlined below.
Your home is one of your most valuable assets. And if you’re filing for bankruptcy, it’s understandable that you might be concerned about what will happen to it. The good news is that in Louisiana, residential property is one asset eligible for bankruptcy exemption.
Depending on the property valuation limit set in Louisiana, certain residential property including the land it rests can be exempt from bankruptcy. The homestead exemption in Louisiana protects up to five acres of land if the home is in a town or up to 200 acres in a metropolitan area. Residents may be able to exempt the entire value of the home if obligations arise from a catastrophic injury or illness. Spouses cannot double the homestead exemption.
When filing bankruptcy, there are a number of insurance benefits that are allowed for an exemption. The most commonly exempt insurance benefits in a Chapter 7 bankruptcy are life insurance benefits. Other benefits that are eligible for bankruptcy exemption include insurance benefits received as a result of natural disasters, health insurance benefits, accident insurance benefits, and fraternal benefit societies.
One of the most common bankruptcy exemptions in the state of Louisiana is vehicles. The state of Louisiana allows individuals and families one exempt vehicle for up to $7,500. Another vehicle may be exempt if it is modified to assist a disabled family member.
Although Chapter 7 bankruptcy does require individuals to liquidate their assets to pay off their debts, there are certain personal items eligible for exemption. Personal property exempt from sale in Chapter 7 bankruptcy includes:
- One cow
- Military dress/accessories
- Engagement or wedding ring ($5,000 in value)
- Federal Earned Income Tax Credit
- Guns and ammunition ($2,500 in value)
- Seventy-five percent of disposable income or 30 times the federal minimum wage (whichever is greater)
- Work tools
- Instruments, tools, and books used for work
- One utility trailer
Trusted Louisiana Bankruptcy Attorneys
Filing for Chapter 7 bankruptcy is no simple task and deserves the attention of a qualified Chapter 7 bankruptcy attorney. If you are filing for bankruptcy in the state of Louisiana, consider working with lawyers you trust like the attorneys at E. Orum Young Law Offices.
Orum Young Law Offices has more than 35 years of experience and has filed the most bankruptcies in Northeast Louisiana. We house experienced bankruptcy attorneys who can assess your current financial state and determine whether Chapter 7 or Chapter 13 bankruptcy is most suitable for your particular case, and which exemptions may apply to you.
Don’t hesitate to get started on improving your financial future. Call the offices of E. Orum Young at (318) 450-3192 today for a free consultation. We’re ready to help!