The Wildcard Exemption
Each individual debt situation is unique, and it is important to consider the many variations and different steps a person can take in this process. When filing for Chapter 7 bankruptcy, there are a number of exemptions that the filer can make that will protect limited amounts of property from liquidation in the proceedings. The federal exemption allowances and the Texas allowances differ substantially, and filers are required to adhere to one scheme or the other without choosing from both.
Bankruptcy is a complex process which requires careful management to ensure that you are maximizing your potential exemptions in order to be able to retain as much property as possible after the completion of proceedings. With the assistance of an experienced Houston bankruptcy attorney at the Russell Van Beustring P.C., you will have the resources you need to make educated decisions about your financial future. To learn more about how federal and state exemptions may apply to you, call us today at 713-973-6650.
Wildcard vs. Homestead Exemption
In the state of Texas, owning property and a home is put at a premium, and large exemptions are available, which can allow you to protect significant amounts of real property from liquidation when filing for Chapter 7 bankruptcy. Not all debtors have much, if any, real property however, and utilizing this exemption scheme may be wasted on you. Instead, the federal system allows for a “wildcard” exemption which allows you to exempt any property if you choose not to use the exemption on real property. Section 522(d)(5) states that debtors can make the following exemptions under federal bankruptcy codes:
Up to $20,200 in value of real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor.
Any property, not to exceed in value $1,075, plus up to $10,125 of any unused amount of the exemption stated above
Essentially this means that a debtor who chooses not to exempt real property may instead exempt up to $10,125 of any property they choose.
At the Russell Van Beustring P.C., we understand that your debt situation is unique and demands personalized attention in order to find the right chapter and exemptions for you. For a free consultation to discuss the details of your case with an experienced Houston bankruptcy lawyer, call us today at 713-973-6650.