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What Are Exemptions In A Bankruptcy Proceeding?

11 U.S.C. § 522(b) Allows an individual debtor to exempt real, personal, or intangible property from the property of the estate. Exempt assets are protected by state law from distribution to your creditors. Typically, exempt assets include some jewelry, vehicles up to a certain dollar amount, the equity in your home up to a certain amount, and tools of the trade.

Under bankruptcy law, you are entitled to list the assets set forth in section 703 or section 704 of the California Code of Civil Procedure as exempt. Exemptions are claimed on Schedule C. As with all schedules, it is important to fully complete and provide all the information requested. If no one objects to the exemptions you have listed within the time frame specified by the bankruptcy court, these assets will not be a part of your bankruptcy estate and will not be used to pay creditors through your bankruptcy case.

Deciding which assets are exempt and how and if you can protect these assets from your creditors can be one of the more important and difficult aspects of your bankruptcy case. It is extremely important to consult an attorney if you have any questions regarding the issue of exempt assets.

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