What are bankruptcy exemptions?
The bankruptcy laws recognize that taking all assets and liquidating them can be overwhelming to the debtor — and prevent the fresh start that the debtor needs. Talk to a bankruptcy lawyer at the Coggins Johnston & Cianci PC law firm in Roseville, California, about bankruptcy exemptions and how they will affect you. Call (916)797-1397 for a free consultation with a bankruptcy attorney. For more information about bankruptcy exemptions, please see our Chapter 7 Bankruptcy Information Center.
Bankruptcy exemptions are the amounts and assets that a person is entitled to keep when filing for personal bankruptcy. These allowances are provided at the federal and state level. The purpose of the exemptions is to ensure that the individual is able to maintain a basic standard of living, so that they can remain self sustaining. At the federal level in the United States, the government provides the following basic exemptions. 1. The debtor is entitled to keep up to $20,200 US Dollars (USD) in equity in their home. Any equity above this must be paid out to the creditors. They may also keep a home that is valued at $20,200 USD or less. 2. A life insurance policy with a value, in accrued dividends or interest of $9,850 USD. 3. Up to $475 USD per item in any household goods, up to a total of $9,850 USD. Household goods include furniture, appliances, clothing, etc. 4. Up to $1,225 USD worth of jewelry. 5. A motor vehicle valued at $3,225 USD or less. 6. Any personal injury compensation p
Bankruptcy exemptions vary from state to state, and 15 states (plus Washington DC) allow you to choose between state and federal bankruptcy laws when claiming your exemptions. These exemptions are basically items that you need for a fresh start after your bankruptcy is discharged. Items that are not exempt can be sold, and the money can be used to pay your creditors. In general, most states allow you to keep much of your personal property, particularly that which has little or no value. You can even keep collateralized property in certain circumstances (of course, you have to reaffirm the debt). Source See the items that most states will allow you to keep. The gist of the matter, however, is that if you are really broke or destitute, you will be allowed to keep most of your items. If you have assets and a lot of property, you will have to give some things in the bankruptcy process. Since the amount of assets you have will dictate how many things you can keep in a bankruptcy, they will
Bankruptcy exemptions vary from state to state. They are laws that ensure that particular assets of a debtor who files bankruptcy are protected so the debtor has a chance to start fresh after the bankruptcy case is complete. Q: What does “Home exempt up to X dollars” mean? A: Bankruptcy exemptions are also meant to ensure that debtors who are solvent (have assets worth more than what they owe) are not simply avoiding their payments to their creditors. For example, if you live in a state with a home exemption of 20,000 and your house is worth 80,000, you may be forced to sell your home in order to pay back your creditors what you owe in debt. In this case the debtor would be entitled to the 20,000 dollar exemption, and the remaining 60,000 would be dispersed among their creditors. Q: What are federal bankruptcy exemptions? A: A number of states are allowed to make a choice between their state bankruptcy exemptions or federal bankruptcy exemptions. Q: What states are eligible to use fede
