Pennsylvania citizens who file for Chapter 7 bankruptcy will undergo the process of having to sell some of their assets. While it’s a common misconception that you’ll have to sell all of your assets, that’s actually not the case. State and federal laws help to determine what are considered non-exempt assets and exempt assets.
What are non-exempt assets?
Consumer bankruptcy specifies non-exempt assets as those that are to be sold as part of your bankruptcy case. These include things like secondary homes, newer model cars, jewelry and even artwork. These non-exempt assets are to be sold off and their proceeds are to be put toward paying off your debt.
What are exempt assets?
On the other hand, exempt assets or those which are not to be sold as part of your bankruptcy case. These include essential assets for your day-to-day living. Examples include your family home, your vehicle and personal belongings like your clothing. Federal laws and your specific state laws will determine what things are considered exempt assets that are not to be sold during bankruptcy.
Some states may let you choose which laws to follow
Since most state laws regarding exempt and non-exempt assets are different from federal laws covering this topic, some states will allow you to choose which legal structure you want to use for your bankruptcy case. Pennsylvania is one of the states that will allow you to choose which system you wish to use.
While filing for bankruptcy may not be something that you want to deal with, you may have found that it’s your only option. The best thing that you can do at this point is to understand the various aspects of the bankruptcy process so that you can prepare yourself mentally and physically for what lies ahead.