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Hence, these assets cannot be sold or seized in order to pay off the debts.
An exemption limit applies to any equity you have in property and limits the amount of equity that is exempt. Debtors, often, worry that they will lose their personal possessions and household goods when they file for bankruptcy. The exemptions are based on what is needed by the debtor to live, and a place to live is one of the needed things. It is wise to hire a bankruptcy lawyer to handle such a complicated case as improper filing might lead to seizure of your assets. A bankruptcy lawyer knows all the aspects related to handling of case like this.
These exemptions are defined by statute. Anyone filing for a bankruptcy can file for bankruptcy exemptions. These exemptions vary from state to state. Debtors can file either for exemptions at state level or federal level. But, they cannot avail the exemptions in both. Some states are liberal in terms of exemptions while others are quite particular and strict. For example, in certain places, one can get a home exempted from a Chapter 13 bankruptcy only when the home is used as a primary residence. If one is not making use of the property, it cannot be considered as a necessity. This means, any other property apart from those exempted is termed as non-exempt. The unsecured creditors need to be paid from the non exempt property the debtor possesses.
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