What Can I Keep When I File Bankruptcy?

You Might Be Surprised!

You will probably be surprised. For many things, the value of the asset that you get to keep does not matter. For instance, health aids and burial lots and your IRA are just three of the 18 categories of assets that you get to keep after filing bankruptcy. The law calls these things “exemptions.”

For another 10 categories of assets, the law sets a limit on how much equity in the property you can have and still keep it. Equity means the difference between what something is worth and what you owe on it. For instance, you can keep $20,200 of home equity. So, for example, if your home is worth $100,000 and you owed $80,000 on it, then the bankruptcy court won’t take it from you if you are current on the mortgage and want to keep it.

Keep in mind that the value of the property is the current, real life market value. You may have paid $35,000 for that Pontiac 8 months ago, but it’s not worth that now. The question is how much could you get for it right now if you were to sell it? That’s the real marketplace value. Here are some of the things you can keep after filing bankruptcy:

For motor vehicles, the limit is $3,225 in equity. Cash on hand or in the bank, $400 total. Household goods, including clothing, appliances hunting and fishing equipment and other “misc” items, a total value of $10,725.

Jewelry is limited to a total of $1,350. Work tools, up to $2,025 worth. Retirement funds, generally, all of it. Personal Injury proceeds, $20,200.

Child support, no limit. Most, if not all, of your current paycheck. Then there’s a “wild card” that you can use to claim up to $1,075 worth of anything you want.

Also, beginning on April 1, 2010 and once each 3 year period after that, the exemption limits are required to be adjusted to reflect the change in the consumer price index, rounded to the nearest $25.

Fact is, many people are quite surprised that when they  file a bankruptcy, they may be able to keep almost everything they want. When we meet with you, we will go over your assets and help you determine their values so you can see for yourself what you can keep if you file bankruptcy. The law on the amount of exemptions changes often and the amount may depend on several factors so we can go over this when you meet with us.