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Making ends meet can be difficult, even at the best of times. Sometimes, people find that they just cannot do it with the crushing weight of their debt adding to the problem. If this is something that sounds familiar, you may benefit from filing for a chapter 7 bankruptcy. Federal bankruptcy laws can help you eliminate most types of debt. Additionally, chapter 7 is the most prevalent type of bankruptcy filing in the U.S.

Chapter 7 Bankruptcy Basics

Chapter 7 is sometimes called a liquidation or straight bankruptcy. The court will appoint a trustee to oversee your case. Part of the job of the trustee is to take control of your assets, sell them, and then distribute that money to the creditors. Creditors are required to submit the correct claims to receive payment from the selling of the assets.

Exempt Assets

While the trustee is required to take possession of your assets, they are not allowed to take all of them. You are allowed to keep certain assets, known as exempt property so that you aren’t completely stripped of everything you need.

Exempt assets are ruled by both federal and state statutes and they refer to certain types of property. The federal government has a list of exemptions, and many states have created their lists as well. In some cases, debtors are required to use the state list depending on the jurisdiction. Other states, however, allow debtors to choose between the federal list or their state’s list. Common examples of exemptions include the following.

• Your home
• Your automobile
• Some retirement accounts
• Other assets that are necessary for you to work

Retirement plan exemptions are available for everyone. This is true even if you must accept your state’s list of exemptions and they don’t provide an exemption for retirement accounts.

Chapter 7 Paperwork

You’ll want to collect all your financial records. This includes credit card statements, bank statements, pay stubs, and loan documents. This information will help you complete the petition for bankruptcy, the related schedules, statement of financial affairs, and other documents you will need to submit to the courts.

If you have any questions about how a chapter 7 bankruptcy can help you seek relief, it’s a good idea to contact an experienced bankruptcy attorney, like a bankruptcy lawyer in Memphis, TN. They can answer your questions and help you determine if chapter 7 is right for you. Additionally, they can handle all the paperwork that will be required by the court.

Thank you to the experts at Darrell Castle & Associates for their input into bankruptcy law.