June 27, 2013 Leave a comment
Is there some special heirloom you have or a piece of furniture you like or do you have an old car that you just can’t lose? Maybe you own an old classic ’57 Chevy or Corvette that you want to fix up someday. You may have a great number of debts which you realize you can’t afford to pay but you are worried about the safety of your favorite possessions if you do file for bankruptcy.
The good news is that you probably can keep these possessions as long as the property’s value is less than the exemptions allowed in bankruptcy. In bankruptcy law there are very liberal exemptions and these exemptions are what allow you to keep property after the bankruptcy is over.
One very helpful exemption is something called the “wildcard” exemption that you can use to protect any kind of property that you own. At the time of this writing the wildcard exemption is $26,425.00 and that is pretty generous.
There are other exemptions besides the wildcard. There is one for your car, and one for your furniture, clothes, and household items. There are separate exemptions for cars, jewelry, and tools of the trade and don’t worry about you retirement account because that is almost certainly exempt. Your attorney can advise you about all of the applicable exemptions in your state.
Your property will fit within the wildcard exemption as long as your property is worth less than $26,425.00. If it does then you can keep it. To value the property you want to go to a website like Kelly Blue Book for cars or you can go to Ebay or even Craig’s list to see what items similar to yours are selling for.
To get a more accurate valuation of the property you can hire an estimator or property appraiser who, if you pay him, will give you his or her valuation of the property. If the property is of a special nature like a record collection then a property estimator who owns a record store could do the valuation. The same thing applies for jewelry or a stamp collection, or an old gun from the civil war (jewelry even has its own separate exemption). There is usually someone out there who can accurately value your property whatever the type.
Remember the bankruptcy trustee can only take your property if it has a value beyond your exemptions. This is why it is so important to establish the fair market value of the item(s). So if you (and your bankruptcy attorney) show the trustee that the fair market value is less than the exemption amount that you claim then you will usually be okay.
It is possible that the trustee can get his own valuation which could be higher than yours but if you get a reliable appraiser for the property you can usually defend your appraisal. It is always good to consult with a bankruptcy attorney if you have any questions about whether you can keep your property in bankruptcy and if you should or should not file bankruptcy.
I am a San Diego bankruptcy attorney. For further questions please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com. Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!
For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at firstname.lastname@example.org.
Corvette by Zombieite. Jewelry photo courtesy of Gnilenkov Aleksey.