What Are Bankruptcy Exemptions?

When it comes to filing for bankruptcy, there are many things you need to understand. One of these is what bankruptcy exemptions are and how they work.

Exemptions are items or property that you can keep when you file for bankruptcy. This can include your home, car, furniture, and other personal belongings. How much exemption you get depends on the state you live in.

There are two types of bankruptcy exemptions: federal and state. Federal exemptions are set by the U.S. government and apply to all states. State exemptions vary from state to state. When filing, you can use either federal or state exemptions, but not both.

Federal Bankruptcy Exemptions

The federal government sets certain limits on what you can keep when you file for bankruptcy. These limits are called federal exemptions.

You can find a complete list of federal exemptions in the U.S. Bankruptcy Code. Some of the most common federal exemptions include:

  • Your home: You can exempt up to $23,675 of equity in your home ($47,350 if you’re married and filing jointly).
  • Your car: You can exempt up to $3,775 of equity in your car ($7,550 if you’re married and filing jointly).
  • Clothing: You can exempt up to $575 of clothing.
  • Household goods: You can exempt up to $12,625 of household goods. This includes furniture, appliances, dishes, and silverware.
  • Tools of the trade: You can exempt up to $2,375 of tools you need for your job.
  • Pensions: You can exempt certain types of pensions, such as 401(k)s and IRAs.

State Bankruptcy Exemptions

Learning what bankruptcy exemptions areIn addition to federal exemptions, each state has its own set of exemptions. These vary from state to state, so it’s important to check the laws in your state.

Some states have what’s called a “wildcard” exemption, which allows you to exempt any property up to a certain value.

For example, let’s say your state has a $5,000 wildcard exemption. This means you can exempt up to $5,000 of any property you own. So, if you have a car worth $4,000 and a computer worth $1,500, you can exempt both of them.

Some states also have what’s called a “homestead” exemption. This allows you to exempt your home, up to a certain value.

For example, let’s say your state has a $50,000 homestead exemption. This means you can exempt up to $50,000 of equity in your home. So, if your home is worth $100,000 and you have $50,000 of equity in it, you can exempt the entire value of your home.

How to Claim Exemptions

When you file for bankruptcy, you’ll need to fill out a form called Schedule C. This form lists all of your property and allows you to claim your exemptions. You’ll need to list each piece of property you want to exempt and its value.

If you’re claiming a federal exemption, you’ll need to use the form provided by the U.S. government. If you’re claiming a state exemption, you’ll need to use the form provided by your state. You can find these forms on the website of the U.S. Courts or your state court system.

Once you’ve filled out the form, you’ll need to file it with the court. You’ll also need to provide proof of your exemptions, such as appraisals or receipts. The court will review your form and decide whether to grant your exemptions.

If you have any questions about bankruptcy exemptions, you should speak with an experienced bankruptcy attorney. An attorney can help you understand the laws in your state and determine which exemptions you’re entitled to.

You Have Help!

If you are in the stressful situation of having to file for bankruptcy, remember that there are advantages. At Blue Bee Bankruptcy, our goal is to help people rebuild their lives after filing for bankruptcy.

Our attorneys are knowledgeable in chapter 7, chapter 11, and chapter 13. We can help you make the right filing decision for your unique case.

 

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If you’re dealing with the potential of bankruptcy, give us a call. Our team will work to help you by reviewing all of the options our firm has available. We will ensure you’ll get the best possible outcome for your situation.

Get in touch today so we can start working on either halting bankruptcies or preventing them from taking place altogether!

Contact Us Today For Help! You can schedule your free consultation online or call us at (801) 285-098.

 

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