When you’re facing Chapter 13 bankruptcy in New York, you may be wondering if any of your property is actually able to be exempt from the process. First, you need to understand the process of Chapter 13 bankruptcy. This form of bankruptcy is used to help you reorganize your debts, allowing you to create a repayment plan that allows you to pay back your creditors. In many cases, your debt load can be reduced, and a single payment may be able to be arranged.
Because Chapter 13 bankruptcy doesn’t involve liquidation, the goals are different. Chapter 13 bankruptcy is primarily used by those with a significant income and the means to pay back creditors; because of the willingness to pay back debts over time, there isn’t a reason to sell the debtor’s property or to collect and redistribute it. The debt is meant to be repaid within three to five years, allowing the debtor to keep the items while maintaining a payment plan that allows all of his or her items to be paid off relatively quickly.
There are a few exceptions where you need to know about bankruptcy exemptions in Chapter 13 bankruptcy, though. For instance, the value of your non-exempt property is used to determine a baseline for repaying the creditors you owe. So, the more items you can exempt, the less that baseline will be.
There are several things that can be exempt. Some of them are family homes, automobiles, jewelry, household items like furniture or bedding and personal items like clothing. With this to think about, if you’re ready to look into Chapter 13 bankruptcy, speak with someone who is familiar with this kind of law. It’s important that you follow all the rules with this kind of bankruptcy, so you can get out of debt fast.
Source: FindLaw, “Exempt Property in a Chapter 13 Bankruptcy” Oct. 09, 2014by