Chapter 7 Bankruptcy Exemptions
Most American consumers believe that once you file for bankruptcy you will lose everything. In fact, most people do not know most people are able to keep most of their personal items, their cars, and even their homes. In California, if you qualify as a Chapter 7 bankruptcy, there are two exemptions that you can qualify for in order to keep some of the more substantive things in your life.
Under the first exemption, for a California bankruptcy you would be allowed to keep the following:
- Your home, if you don’t have more than $50,000 in equity in the house (today’s value less costs of sale less payoff balances on all liens and mortgage loans); if single and not disabled or $75,000 for families if no other member has a homestead; $125,000 if 65 or older or disabled; $100,000 if 55 or older, single and earned less than $15,000 or married and earned less than $20,000 and creditors forced the sale. Sale proceeds are exempt for 6 months after received.
- Up to $2,000 in building materials to improve your home
- Your motor vehicle, if you don’t have more than $1,900 in equity in the vehicle (today’s value less costs of sale less payoff balances on all liens and mortgages).
- Appliances, furnishing, clothing and food needed
- Jewelry, family heirlooms and art up to a total of $5,000 in value
- Burial plots
- Health aids
- Unemployment, disability, veterans’, workers’ compensation and social security benefits
- Alimony
- Retirement plan and life insurance proceeds
- Business partnership property
- Tools of your trade, up to $5,000 in value
- Bank deposits from Social Security Administration up to $2000
Under the 2nd bankruptcy exemption, you can keep the following:
- Your home, if you don’t have more than $18,450 in equity in the house (today’s value less costs of sale less payoff balances on all liens and mortgages).
- Your motor vehicle, if you don’t have more than $2,950 in equity in the vehicle (today’s value less costs of sale less payoff balances on all liens and mortgages).
- Appliances, furnishings. Books and musical instruments, up to $475 in value per item
- Jewelry, up to $1,225 in value
Read the complete BK article online.
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