Filing bankruptcy can be a nerve wracking experience. This is especially true when people are under the impression that their court-appointed bankruptcy trustee has the power to attach and sell all of their assets. This is, however, not the case, and each state has identified certain assets that will be protected in bankruptcy proceedings. This is as long as the relevant exemption is claimed on the debtor's bankruptcy petition and schedules.
A bankruptcy attorney usually assists a debtor with the completion and filing of his petition and schedules and is the one responsible for claiming the state-provided exemptions. Exactly which exemptions are available will depend on which state the debtor is living in, but all states offer exemptions in the same basic categories including the homestead exemptions and the tools-of-trade exemptions.
Maryland, for instance, offers protection of up to $2,500 in equity on a debtor's real estate while, in Ohio, debtors can claim a homestead exemption of up to $5,000 in equity per person, with a maximum of $10,000. These homestead exemptions are not, however, available for rental properties.
As far as tools-of-trade and professional books are concerned, Maryland bankruptcy law states that debtors can claim as exempt professional books and tools of all kind with a value of up to $2,500 while Ohio, on the other hand, limits this value to $750. Bankruptcy lawyers are also aware that a debtor's automobile is an extremely important asset as it's sometimes the debtor's only means of transportation, and they will therefore try to protect it to the full extent of the law.
In Ohio, up to $1,000 of the value of any one of the debtor's motor vehicles can be claimed as exempt while in Maryland, the $3,000 wildcard exemption can be used to protect a vehicle or, for that matter, to protect any other asset. A wildcard exemption is also available in Ohio, and this will provide a further $400 protection for any asset.
Unemployment and Workers Compensation benefits can be important sources of income for a debtor, and state law has also made provision for the protection of these benefits in bankruptcy situations. Both Ohio and Maryland debtors, for instance, can claim as exempt 100% of all unemployment and workers compensation benefits as well as all disability benefits. In both states, however, all child support amounts that may be owing by the debtor will be deducted from the unemployment compensation benefits before they are paid to him.
Several further exemptions are available in both states. Maryland offers protection for, among other assets, qualified retirement plans and life insurance policy proceeds. Ohio allows exemptions for further assets like alimony amounts owing to the debtor as well as personal clothing and family pictures. All states try to offer exemptions, be they large or small, over all types of real and personal property so that the debtor will not be forced to lose everything. Although filing for bankruptcy is a way to eliminate debt, it does not also have to eliminate all debtor's assets.
Author Resource:-
You can easily rebuild your credit after bankruptcy. You'll be surprised how your credit scores after bankruptcy will produce many solicitations from lenders offering to finance homes, vehicles and credit cards.
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