Learn about property that the debtor may elect to exclude from the estate.
Every state exempts specified assets from creditors' claims. Common examples include the debtor's home, car, tools of the trade, retirement benefits, life-insurance proceeds, alimony payments, and more. The Bankruptcy Code incorporates exemptions in § 522, which allows individual debtors to exempt specified assets from the estate.
In bankruptcy, a properly exempted asset revests in the debtor and ceases to be estate property. But exemptions aren't automatic. To benefit from exemptions, the...