Filing for bankruptcy provides a sense of relief as it allows you to start over financially, which is the primary benefit of doing so. During filing chapter 7 in Athens, you may be able to get out of the duty you have under the law to repay your creditors.

The vast majority of unsecured obligations are usually dischargeable in Chapter 7 bankruptcy. When filing, you can hand over any property used as collateral for secured obligations. This includes things like your mortgage and vehicle loans. When a person’s outstanding debt on the loan is more than the value of their home, this choice may benefit them.

You cannot continue to provide for your essential living requirements without owning some real estate. If you filed for bankruptcy and lost everything, you owned, getting restarted on the right foot would be far more difficult. For this reason, you may safeguard some assets and property in a bankruptcy proceeding by using exemptions. This will enable you to maintain your property and cash if you file for Chapter 7 bankruptcy protection.

 

Exemptions From Bankruptcy Under State and Federal Law

The Bankruptcy Code has a list of bankruptcy exemptions that debtors can use to shield the value of their equity in a property during a Chapter 7 proceeding. The federal exemptions provide protection for particular dollar amounts invested in various assets. Every three years, the government makes changes to the exemptions that apply to federal bankruptcies. In accordance with federal bankruptcy exemptions, there is not a particular cash exemption that may be claimed.

When filing for bankruptcy, you have the option of protecting cash assets with up to $12,575 of any unused amount of a homestead exemption. There is, however, a wildcard exemption that you may apply to safeguard up to $1,325 in any property. These prices are in effect as of the first of April in 2019. Consequently, if you make use of the bankruptcy exemptions provided by the federal government, you may be able to exempt a sizeable sum of cash.

The term “cash” refers to money that is held physically, such as in your pocket, beneath your mattress, buried in your backyard, in a bank account, held by a friend, in a piggy bank, or even in a cup holder of your vehicle.

 

What Kinds of Things are Immune From Bankruptcy in Each State?

The Bankruptcy Code gives each state the authority to formulate its own laws on bankruptcy exemptions. In the event of bankruptcy, individual states have the ability to create their own unique exemptions.

Debtors may be required to employ state bankruptcy exemptions in some states. In contrast, other states may allow them to select between state and federal bankruptcy exemptions. If you’re wondering whether you can use state bankruptcy exemptions or federal bankruptcy exemptions, it depends on the state where you live.

After living in Athens for more than six months, you will be eligible to file for bankruptcy there. However, to qualify for Athen’s exemptions, you must have lived in Athens for a significantly longer period—at least 730 days before filing, to be exact. In that case, you would take advantage of the exemptions from the state you came from before.

Wildcard exemptions are available in several states, which might assist you in protecting surplus funds. Different state laws may grant different types of exemptions in varying amounts. When compared to other states, several states have cash exemptions that are much smaller. Simply said, the state determines that.

As stated earlier, when you file for bankruptcy, you do not automatically have to give up all you own. You are permitted to retain any item that meets the criteria for an exempt asset, including cash. The problem is that most state exemptions do not allow you to preserve a large amount of cash. On the other hand, you might be able to use a wildcard exception to cover a more significant sum.

 

Protecting Cash Through the Use of Bankruptcy Exemptions

When deciding whether or not to file for bankruptcy, the cash exemption is frequently one of the most important factors for Athens residents. You might wonder how much cash you can keep when filing for Chapter 7 in Athens.

The answer to this question for individuals filing for bankruptcy in the state of Athens is a maximum of $5,600, while the answer for married couples filing for bankruptcy is $11,200. However, suppose you have already used up the maximum amount of the exemption on your home. In that case, you will only be able to shield $600 for yourself or $1,200 if you are married and filing jointly.

Do you have more equity in your property in Athens than twenty thousand dollars? If you answered yes, then it is probable that you will use the full amount of the exemption available for your residence. In order to understand completely, it’s a good idea to consult a bankruptcy attorney.

It is possible that you will be required to postpone the filing of your taxes if the individual has an excessive amount of money in their bank account. People who find themselves in this predicament may find that they have no choice but to pay whatever bills they have fallen behind on, whether it be a daycare bill, a utility bill, a mortgage payment, a roof repair, a car repair, a cell phone bill, a house payment, or any other type of household expense. Understanding your rights, the exemptions, and what steps you need to take moving forward will help clear some of the confusion. Navigating the bankruptcy world can be confusing without the support and a knowledgeable attorney.

Filing Chapter 7 in Athens means you agree that in exchange for a bankruptcy discharge, the trustee assigned to oversee your case can sell the property to repay unsecured creditors. But suppose the piece of property or the sum of money in question is exempt according to the regulations governing bankruptcy exemptions. In that case, you are allowed to keep it. This is a condition of filing for Chapter 7 bankruptcy.

 

Cash That May Be Exempt From Taxes

The following are some instances of cash (or assets that may easily be converted to cash) that may be eligible for enhanced protection under the bankruptcy exemptions:

• Individual Retirement Accounts (IRAs) and Other Tax-Exempt Retirement Benefits
• Wages
• Unemployment benefits
• Public assistance
• Money in the bank or available cash
• Proceeds from Social Security (so long as they are kept in a separate bank account; these monies lose their protection if they are mixed with money from other sources)

 

Cash That Will Not Be Exempt From Taxes

If you sell an exempt property prior to filing for bankruptcy, the exemption protection will often no longer apply to the cash proceeds from the sale of the property. For instance, if you are eligible for a motor vehicle exemption of $3000 but sell your car prior to filing for bankruptcy, you will not be able to claim the proceeds from the sale as exempt under the motor vehicle exemption. This is because the proceeds from the sale are considered non-exempt income.

On the other hand, this is not always the case. For instance, the homestead exemptions offered by several states enable homeowners to shield a portion of their income from selling their primary residence for a set amount of time. Additionally, the exempt status of Social Security payments is maintained so long as it is possible to track them to their original source (for instance, if you deposit the Social Security funds in an exclusive-use bank account).

 

What Happens if I Have More Cash Than I’m Allowed?

It depends on the quantity of cash that is not exempt from taxation and the amount of unsecured debt you owe. If you have more cash than the allowed exemption amount, you can be obliged to turn it over to the government. If the amount of non-exempt cash is modest, the Chapter 7 trustee may decide not to sell any assets and just keep the money if there are no other assets.

 

Are There Alternatives to Filing Chapter 7 in Athens?

Before you file for bankruptcy under Chapter 7, it is imperative that you have a solid understanding of the bankruptcy exemptions that are available to you and whether or not any of your property may be subject to sale by the appointed trustee. Examining the benefits and drawbacks of filing for bankruptcy might also be helpful.

Getting rid of debt doesn’t have to break the bank. If you do not qualify for Chapter 7 or if filing might put your property in danger, you might also want to investigate your alternative options for debt relief. Talking to your attorney or debt consolidation specialists may help.

 

Discuss Your Case With Our Attorney When You Are Filing Chapter 7 in Athens

Understanding how much cash you can keep when filing Chapter 7 in Athens and what will happen to your possessions in the event that you file for bankruptcy is important. If you file and make a mistake about an exemption, there is a chance you won’t be able to get the case dismissed.

Even if you end up losing something you had anticipated being able to keep, the court will nevertheless proceed with dividing up your non-exempt assets and giving them to your creditors. Take the time to talk with your attorney about your concerns and make sure all your questions are answered as you proceed through the process. Trusting the team you’re working with can make all the difference. Filing chapter 7 in Athens can be stressful. Educating yourself is key. For a free consultation with an experienced chapter 7 bankruptcy attorney in Athens, contact Morgan & Morgan.

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