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What is an Exemption?

Type: 
Debtor
Answer: 

An “exemption” is a statutory right that an individual debtor may exercise to exempt the equity in certain real and personal property from certain creditors.  If there is no non-exempt equity in your property, after considering its value, consensual liens, and the amount of the exemption, then your trustee may determine that the property should not be sold for the benefit of your creditors or that such property should not be considered in determining the amount of your payment under a Chapter 13 plan.  An exemption has no effect on the rights of a creditor with a consensual lien, such as a mortgage creditor or a creditor that financed the purchase of a vehicle. 

A debtor takes an exemption by completing Schedule C.