Bank finance articles and tips

Declaring a Chapter 7 or a Chapter 13 personal bankruptcy with a bankruptcy lawyer is an option that you can take if you've been struggling with mounting bills, crippling credit card payments and other debts that are eating away at your hard-earned money.

Filing for bankruptcy is a relatively easy process - especially with an experienced bankruptcy attorney by your side - that can take anywhere from three to six months to finalize, and can give you that much-needed chance to give your credit score the healthy boost that it needs. When filing for bankruptcy, it's important to remember that there are certain debts that can be claimed as an exemption, both on the state and federal level. Luckily, we've got the rundown of what exemptions you can claim when filing.

When you file for bankruptcy, there are certain debts that are federally exempt from being forgiven. These debts include alimony, child support and some income taxes. Until 2005, this exemption used to include student loan payments; however, laws have been passed to exclude student loan debt from federal exemptions. Of course, it's important to distinguish between state and federal exemptions; depending upon where you reside, you can choose up to the following exemptions as opposed to any state exemptions:

• Homestead - Real property to $17,450

• Insurance - Unemployment or disability benefits; life insurance for any dependents; life insurance policy values up to $9,300; life insurance contracts that have not yet matured.

• Other payments - Alimony; child support payments.

• Pensions - Those needed for support

• Public Benefits - These exemptions can include social security payments, public assistance, unemployment compensation, veteran's assistance, etc.

• Education Funds - If you've got savings accumulating in an educational retirement account or an approved tuition program and have opened it over a year ago - and it will directly benefit your child or grandchild - this is excluded from your debtor's estate.
  

In addition to these assets, you can exempt up to $925 of any personal property, as defined by Law Section (d)(5). In this way, you can keep some personal property from being included in your debtor's estate. If you want to find out if a state or federal exemption will allow you to keep more personal assets, ask your bankruptcy lawyer, who will be better able to assist you with identifying what exemptions you can claim.

Not sure what state you should use in order to claim your state exemption? Simple: you can claim that state's exemption if you've resided there for more than two years.

Declaring bankruptcy can give you that financial freedom that you've been dreaming of for so long.

Reed Allmand, sponsoring attorney for Bankruptcy.net, is constantly looking for ways to provide the best financial information for his clients. Whether you are considering filing for bankruptcy, or are currently going through a Chapter 7 or Chapter 13, visit http://www.bankruptcy.net for up to date news and information you need to know.

By Reed Allmand
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