What assets are Exempt Property from bankruptcy?

Certain things you own, or may be entitled to, do not become part of what is known as the "bankruptcy estate", because they are considered "exempt". Exemptions are extremely important since your claim to an exemption may be the deciding factor as to the Chapter of the Bankruptcy Code under which you will file - or whether or not to file at all. For example, if you own a home, all, or a portion of the equity in your home may be considered "exempt" property. If your home has more equity than allowed by the applicable exemption, and you wish to keep your home, then a bankruptcy under Chapter 7 would be out of the question, since in that type of the case, you could not protect your home. Likewise, in a Chapter 13 case, the amount of your monthly Plan payments may be governed by the amount of money that would have been generated had your non-exempt property been taken by a Trustee and sold.

Just what is exempt and what is not exempt is governed by statute. The Bankruptcy statute has a set of exemptions written into it, but many States have more generous exemptions written into their statutes. In some states, someone filing bankruptcy can choose which set of exemptions to use. In others, only the state exemptions are permitted. In still others, only the Federal Bankrutpcy exemptions may be used. Recent changes in the Bankruptcy Code have attempted to limit some of the state exemptions, and that can make a substantial difference in the way a bankruptcy is filed. Until several years ago, for example, a person's homestead was considered exempt property, regardless of the equity. Not so now. But generally speaking, unless these things are promised as collateral for a loan or a line of credit or are antiques, collectibles or particularly valuable, your clothing, household goods and furnishings, TV, stereo, an IRA, an ERISA qualified pension plan, veterans, disability, workers comp or unemployment benefits, a portion of the equity in your car and maybe even some money in the bank will be considered exempt property.

Don't take chances. Our bankruptcy attorneys are constantly monitoring the applicable exemption statutes and will know which exemptions will apply to your case and how to best protect your assets. We will explain your bankruptcy options to you, including how your ability to exempt certain assets will influence your decision to file bankruptcy. Our goal is to get you through the process and secure your discharge without losing the things you need to go on with your life.