Contents
Bankruptcy Fundamentals
Gathering Your Financial Info
How to Find a Bankruptcy Lawyer
Should You File Chapter 7 or 13?
Exempt Property in Bankruptcies
Mandatory Credit Counseling
How to File for Chapter 7 Bankruptcy
How to File for Chapter 13 Bankruptcy
How to Get Credit After Bankruptcy
How to Improve Your Credit After Bankruptcy
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Exempt Property in Bankruptcies
Under the Code, all property and assets can be defined as belonging to one of two categories:
- Exempt property: Refers to the property that you own on the date of filing for bankruptcy that the court can’t legally seize and sell in order to pay back creditors
- Property of the estate: Refers to all the property you own at the time of filing (property of the estate not covered by an exemption is subject to seizure)
What Property Qualifies as Exempt?
The kinds of property that qualify as exemptions vary from state to state. Some states use their own list of exemptions exclusively. Other states allow you to choose to use the state’s list of exemptions or the list of exemptions authorized by the federal government in section 522(d) of the Code, which specifies items exempt (up to a certain value) from seizure and sale as a result of filing for personal bankruptcy. These items include jewelry, cars, and homes.
How To Claim Exemptions
The bankruptcy petition for Chapter 7 and 13 includes a form where you can list the items you’d like to claim as exempt. To determine which exemptions apply in your case:
- Research the exemption rules in your state of residence. If you haven’t lived in your current state of residence for at least two years, you may need to use the exemptions of the state in which you lived previously. The most direct ways to determine which exemptions apply in your state is to call the clerk’s office of a bankruptcy court in your state.
- Make sure to find out whether your state allows you to choose between federal and state exemptions.
Due to the complexity of the exemption rules, it’s generally best to consult a bankruptcy lawyer to assess how exemptions might affect you.
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