Are you worried about your personal belongings being taken if you file for bankruptcy? Well, don’t be! There are many common misconceptions about filing for bankruptcy. One of the most common myths is that the Bankruptcy Court will take your valued personal possessions and sell them to your creditors in order to pay back your debts. This is completely wrong.
Keep Your Stuff When Filing for Bankruptcy!
In a chapter 7 bankruptcy filed in California, you can keep up to $25,340.00 of miscellaneous personal property (through the Wildcard exemption). This can be in the form of cash, money in the bank, a tax refund, books, watches, pets…any of your cherished personal property. Additionally, if you have equity in your car, you can protect up to $4,800 of value (through the Motor Vehicle exemption). Let’s say your car is valued at $10,800. You can still fully protect it by using the full Motor Vehicle exemption and then an additional $6,000 from your Wildcard exemption. This means that your car that is worth $10,800 is fully protected from the Bankruptcy Court–they cannot take it!
Exemptions are what your bankruptcy attorney will use to protect your property so that you can keep it when you file for bankruptcy. In addition to the Wildcard exemption and Motor Vehicle exemption, there are many other ones that will protect your personal property. These are some of the most important ones:
- Household Goods exemption: no limit on how much household furniture and goods you can protect
- Jewelry: protect up to $1,425
- Pension or Retirement Account: no limit on how much you can protect
An expert bankruptcy attorney will use these exemptions to let you keep the things you’ve worked hard to buy. Let’s take a look at an example to see how these bankruptcy exemptions work:
Joe needs to file for bankruptcy to get out from overwhelming debt and to get a fresh start. He has a $8,000 car that’s paid off and that he uses for work; $10,000 in his checking account; a $500 wedding ring; $50,000 in an IRA; and about $5,000 worth of furniture and power tools. The good news for Joe is that all of his property will be fully protected in the bankruptcy:
- $8,000 car: fully protected using $4,800 Motor Vehicle exemption and $3,200 Wildcard exemption
- $10,000 in checking account: fully protected using $10,000 Wildcard exemption
- $500 wedding ring: fully protected using the Jewelry exemption
- $50,000 in IRA: fully protected using the unlimited Retirement exemption
- $5,000 of furniture and tools: fully protected using the unlimited Household exemption
In this example, all of Joe’s things are fully protected in his bankruptcy case and he gets to keep all of them. He even has $12,140 left of his Wildcard exemption to protect any other property he may have!
Now you know that filing for bankruptcy does not necessarily mean that you don’t any assets or that the assets you do have will be taken from you. These exemptions will protect your cash, car, clothes, and cats! Contact Atlantis Law LLP to speak with an
experienced bankruptcy attorney who will make sure you will keep your valued personal property when you file for bankruptcy. Based in Rancho Cucamonga, we have helped hundreds of families in San Bernardino and Riverside county file for bankruptcy. We are proud of our 100% success rate. We are not just bankruptcy attorneys, but trusted advisers, counselors, and friends.