Common Exemptions

When an individual files for Chapter 7 Bankruptcy one of the most important aspects of the case are the exemptions used to protect the individual’s property.  This is because a Chapter 7 Bankruptcy is actually a liquidation of assets.   The court appoints a Trustee to review your case and determine if you own any assets that are unprotected by exemptions under the code.  If you do, the Trustee is tasked with selling those items and using the money to repay your creditors a portion of what they are owed.  In most cases, however, the individuals who file do not have any unprotected assets.  Currently the most common exemptions used in bankruptcy followings are:
$22,975.00  Equity in your home:  This can be used for a house, mobile home or condominium.
$12,250.00  Household Goods and Furnishings:  Includes appliances, furniture,  pots, pans, pictures, clothing and accessories.
$3,675.00   Automobile Equity:  Can only be used to protect one vehicle and cannot be split.
$1,550.00  Jewelry:  All jewelry must be listed including wedding rings and costume jewelry.
$2,300.00  Professional Tools and Books:  Tools, books and other items necessary for the Debtor to conduct business.
$12,250.00  Whole Life Insurance Policy:  Whole life insurance policies build loan value and typically can be cashed out.
$1,225.00  Wild Card:  This can be used to protect any property that the Debtor chooses.
$11,500.00  Additional Wild Card: If Debtors do not use all of their home equity exemption, they can add a limited amount to their wild card exemption.
Unlimited:  Pensions are fully protected under the bankruptcy code.
Unlimited:  401k, 403b, and other retirement accounts.
Unlimited:  Social Security Benefits