Chapter 7 Exemptions
When filing for bankruptcy under Chapter 7, certain items of property will be exempt from the filing. Each state has different exemptions but the main ones of homestead and vehicle apply to varying degrees in all states. At the time of filing you will need to list all items that are exempted property and provide a description of each item along with its current value and the items exemption value. The value of Chapter 7 exemptions differ for each state so it is important to see a local bankruptcy lawyer.
The main exemption is your house or place of residence. The value of equity in your house that is exempt from your bankruptcy filing varies from state to state. If your property is mortgaged you will still need to keep up with the repayments.
Your car or vehicle will be exempt if its equity is less than the exemption value. You may be able to pay the amount above the exemption value in order to keep your car. A second vehicle will only be exempt if it is your work vehicle and you use it to go about your business. If the car is covered by a loan you will need to keep paying that loan.
Other Chapter 7 exemptions include private and personal property. Appliances and household furniture are generally exempt under Chapter 7 as is clothing and a certain amount of jewellery. Payments from alimony and child support are exempt from bankruptcy filings as are public benefits such as unemployment and worker’s compensation and retirement plans. In some states tool that you use for work can be exempt up to a dollar amount. This amount varies so you will need to see a local attorney to determine the exact amount of Chapter 7 exemptions.
Together with the bankruptcy papers you will need to file a schedule of all property that falls under exemption. You will need to list the market value, a detailed description and the exemption value on the schedule.
Private property that does not fall under Chapter 7 exemptions in your state may include stamp collections and coin collections, bank accounts, stocks and bonds and other vehicles.