Economic turns can occur without warning and leave consumers struggling to make ends meet. A job loss, illness or divorce can devastate a budget and create a financial spiral that seems impossible to get out of. For many, bankruptcy offers relief from this burden and a chance for a fresh financial start. However, without understanding the bankruptcy exemptions the law allows, some in Michigan may hesitate to take the step toward debt relief.
The goal of Chapter 7 bankruptcy is to allow the consumer to wipe the slate clean and move forward with optimism about the future. However, Chapter 7, also known as liquidation bankruptcy, has a reputation for leaving applicants destitute. This is simply not the case. Many assets are exempt from liquidation through state and federal laws.
For example, the law may allow a homeowner to retain a certain amount of equity in the home. A family typically keeps at least one vehicle, and bankruptcy will not take one’s clothing, furniture or other essential items. Someone who owns tools or other items for a business may be allowed to keep those items. Individuals may have unique circumstances that provide good reason for the exemption of other items.
This is one reason why it is wise for those seeking bankruptcy protection to do so with the guidance of an attorney. A time of financial struggle is already stressful. A skilled and compassionate Michigan attorney who is knowledgeable about bankruptcy exemptions may be able to ease some of that stress and assist the consumer in meeting his or her goals for debt relief.