Chapter
7 There are other types of exemptions that you must also take into consideration when deciding whether Chapter 7 is the best form of bankruptcy for you. You can exempt $3,450.00 for your car under Federal Exemptions. You can exempt up to $11,525.00 with your household household goods exemption . Your retirement plan is completely exempt (however if you are receiving payments from it, that is not exempt, additionally there are limits to how much can be exempt for an education ira/savings plan). There are additional exemptions that may apply, however, those are the primary exemptions. These exemptions do not apply to business liquidations, only to individual and joint (married) bankruptcies (as well as family farmers). Another consideration is your household income. This is looked at when calculating the Means Test. The Means test determines whether there is a presumption of abuse if you file a chapter 7. The first thing that is looked at is your last 6 months of income from ALL sources. Certain types of income are exempted from this calculation, like Social Security, however it is still necessary to know about it. If your household income is less than your locality's median (which is updated every so often by the IRS), then there is no presumption of abuse. If it is above the median then other factors must be looked at to determine if there is a presumption of abuse. If there is not a presumption, then a chapter 7 may be a good option for you. If you are unsure as to whether a
Chapter 7 is the best option and you are filing a consumer bankruptcy,
you should consider a Chapter
13 bankruptcy. If you
are a family farmer and are unsure about whether a Chapter 7 is best
for you, then you may want to consider a Chapter
12
bankruptcy. If you run a business and would prefer to
reorganize your business rather than liquidate it, then you you might want
to file a Chapter
11 bankruptcy. |