One of the biggest concerns of people considering bankruptcy is the thought of losing their belongings to their creditors. However, this is also one of the biggest misconceptions about filing bankruptcy. The US Bankruptcy Code provides exemptions to consumers filing bankruptcy, which allows them to keep certain property, based on the value of the property. Whether you use the federal exemptions or the state exemptions depends on where you file the bankruptcy petition and where you have resided in the two (2) years prior to filing the bankruptcy petition. Sometimes, using one set of exemptions over another will be more beneficial to you, so it is important to do pre-bankruptcy planning. For example, the federal exemption for a vehicle is currently $2,400, whereas the Arizona state exemption is currently $6,000. This means that if you have a vehicle with equity of $4,000, you will want to use the Arizona exemption versus the federal exemption, if you are able to. The federal exemptions, and most state exemptions, allow consumers to keep a certain amount of equity in a home, a vehicle, household goods and furnishings, certain jewelry, money in a bank account, and retirement funds. However, if you have property that   Read more…