Understanding bankruptcy exemptions

On behalf of The Rollins Law Firm posted in Bankruptcy Exemptions on Thursday, August 8, 2013.

People in Mississippi usually don't have a contingency plan in place for when something goes wrong. While someone may not want to expect the worst, they should make a plan for what they will do in the event something does go wrong, such as a failed business. When someone starts a company, they should be prepared for what could happen if the business doesn't succeed and they lose everything. One man shared his family's experience after their business venture failed. In addition to more than $173,000 in debt, his family lost their house, which wasn't included in the bankruptcy exemption because it was used as collateral. They had to rent an apartment as they tried to put their lives back together.

When someone needs to file bankruptcy, they can avoid several mistakes that will cost them. They should do everything they can to avoid losing their home. Bankruptcy laws in this nation and in all but two states protect a person's home. Some wealthy people have taken advantage of these laws by purchasing expensive homes in states with exceptions.

Other bankruptcy exemptions include a minimum of 75 percent of wages, personal property up to certain limits, some bank accounts and workers' compensation payments. In the case of a jewelry exemption, a family heirloom, such as a treasured wedding ring, might carry great meaning for the individual.

Going through bankruptcy can be a traumatic experience for the involved parties. A bankruptcy attorney might be able to help clients determine the best course of action to pursue for their financial situation.

Source: Forbes, "How To Bounce Back From Bankruptcy & The Loss Of Your Home", Cameron Keng, August 05, 2013

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