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What Can You Keep in Bankruptcy?

What Can I Keep in Bankruptcy?

Keep Your Property When You File

Are you worried about your personal belongings being taken if you file for bankruptcy? Well, you do not have to 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 not necessarily true. In a Chapter 7 bankruptcy filed in California, you can keep up to $25,340 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, and 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 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 exemptions that will protect your personal property.

These are some of the most important exemptions:

  • Household goods exemption: no limit on how much household furniture and goods you can protect
  • Jewelry: protect up to $1,525
  • Pension or retirement account: no limit on how much you can protect

Examples of Exemptions

An expert bankruptcy attorney will use these exemptions to let you keep the things you've worked hard in order to have. Let's take a look at a hypothetical 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 an $8,000 car that is 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 $5,100 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 do not have any assets or that the assets you do have will be taken from you. These exemptions will protect your cash, car, clothes and more.

Contact Atlantis Law to speak with an experienced Rancho Cucamonga bankruptcy attorney who will make sure you will keep your valued personal property when you file for bankruptcy!

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