Some people put off filing bankruptcy because they are afraid of losing everything they have. In reality, bankruptcy may be the best way of protecting assets from creditors.
When a person files bankruptcy, they are allowed to keep certain assets due to something called “exemptions.” Basically, that means certain assets are “exempt” from being forfeited to pay your debts. Neither the bankruptcy trustee nor your creditors can take those assets.
Under South Carolina’s bankruptcy exemptions, you can keep:
- Up to $116,510 in equity in your primary residence (if you are married and file a joint income tax return)
- More than one million dollars in IRA and 401 (k) savings
- A vehicle up to a certain value
- Household furnishings up to a certain value
- Tools up to a certain value you need to do your job
- Wedding rings, watches, necklaces and other jewelry up to a certain value
These are just examples of the assets you can keep. When you file Chapter 7 bankruptcy in South Carolina, you have the choice of using our state’s bankruptcy exemptions or the federal bankruptcy exemptions. An experienced attorney can review your assets and help you determine which set of exemptions would better protect the things you want to keep.
Unfortunately, not all assets can be protected when you file Chapter 7 bankruptcy. One example of an asset you would lose is investment property. However, you can protect all of your assets and still obtain debt relief by filing Chapter 13 bankruptcy.
The Reed Law Firm in Columbia offers a free initial consultation to explain what property you can keep if you file bankruptcy.