What are Actually Exemptions:
It is very important for us to first understand the exact
meaning of the word exemptions, before we proceed further.
The exemption is a type of a rebate etc that has been provided
by obtaining the permission of the competent person or the authority.
Thus, it can be said that by getting an exemption, a person
does not have to pay for something or does not have to provide
something to the person or the body that has given the exemption.
For example, there are many types of income that are exempted
from being calculated in the total taxable income by the income
tax department. There are many types of exemptions that are
available and one such type of exemptions is the bankruptcy
exemptions. Let us discuss about it in our next part of discussion.
The Bankruptcy Exemptions:
It is very important for us to first understand what are the bankruptcy exemptions. As we all know, there are many assets that are exempted by the court from being attached with the rest of the property of the bankrupt debtor. These assets are normally the personal assets, household assets etc. Thus, a person can easily continue using these assets and keeping these with them even after he has filed for the bankruptcy. It is to be noted here that it is not like that all the assets that are exempted under the bankruptcy law can be kept as it is. There is either a certain value or a certain percentage that can be kept as an exempted asset. Calculations regarding all of these have to be made precisely as it is a very sensitive issue and also, the bankruptcy court is also involved in it. There are so many exemptions that are allowed in each country under the various provisions of the bankruptcy law. So, there is a need for an instrument or a formula or a table etc that can calculate the exact value and the corresponding numbers of these exemptions and can give a person a complete solution. Such an instrument is called as the exemption calculator. Let us discuss about it in our next part of discussion.
The Exemption Calculator:
The exemption calculator is basically an instrument, table, formula etc that can give the consolidated value of an asset when all the figures as declared by the law regarding the various assets had been fed, that can be retained by a person even after the bankruptcy has been declared. The bankruptcy trustees often use the exemption calculator, as they have to assure themselves about the assets that have been retained by the bankrupt debtor. The exemption calculator gives the value of each type of assets that can be retained by the person and the bankruptcy trustee sells all the remaining assets as per the orders of the bankruptcy court or the concerned court. Though there are some exemptions that do not require any calculation like the veteran and the pension benefits under the U.S bankruptcy law, there are many other assets that are required to be calculated and only then, the bankrupt debtor can keep the remaining assets with him. Also, there are different exemptions that are provided under the bankruptcy law of various countries; it is not possible to discuss the exemption calculator with respect to all those exemption. But it can of course be discussed in a generalized manner.
The exemption calculator is very much useful in calculating the exemptions that are available under the homestead. A person may live in a large house with much surrounding space, but all of this is not exempted. There is a certain value of homestead that can be retained. This value is not only different in the different countries, but also it is different in the different parts of the same country. Thus, the role of the exemption calculator becomes very important here. If the value is say $20000, this amount may comprise of house and the surrounding place, the dimensions of which would be different at different places owing to the different land rates. This is all made possible in an easy manner by the exemption calculator. It is the case with insurance. There are certain exemptions that are provided in the insurance premiums and policy amounts as well as the maturity amount. The exempted amount can only be arrived after putting these values and the statutory stipulations. This would give us the exact value that is exempt.
There are many other items of exemptions that require a careful calculation and all this can easily be done by the help of the exemption calculator. There are many web sites that contain the exemption calculator. These online exemption calculators are very easy to use and just by the click of a button or mouse, the exempted asset value is displayed in front of a person. Also, the official web site of the bankruptcy courts also contains the information about the exemption calculator and a person can also get the exempted value of the asset there also.
It is to be noted here that the exemption calculator essentially contains different fields that have been made to fill the various figures as per the statutory requirement. All such fields should be filled properly and checked too, in order to get the right amount of the exempted asset value. Any negligence can give incorrect results. So, any person who is using the exemption calculator should use it carefully and all the relevant fields should be filled so as to achieve the correct value.
So, Exemption Calculator is quite useful:
Exemption is a very important issue once the bankruptcy has been declared.
A person would of course like to retain all the assets but the
court of law does not permit this and allow for only some of
the assets that can be kept by the person. These assets are
to be kept as per the value and not as a whole. Thus, it becomes
very important from the point of view of both, the court and
the bankrupt debtor that the calculations regarding the exemptions
are correct and as per the statutory requirements. The exemption
calculator helps a person in this regard and by using this,
the correct value of the exempt assets can easily be arrived
at. Thus, it can be rightly said that the exemption calculator
is a very useful thing, provided it is used with due care.
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