Do you have some special possession you want to keep in bankruptcy? Because you probably can.

corvetteIs 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 jewelryclassic ’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.

valueRemember 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 farquharesq@yahoo.com.

Corvette by Zombieite.  Jewelry photo courtesy of Gnilenkov Aleksey.

Advertisements

Bankruptcy Good News! Because of bankruptcy exemptions you can usually keep all of your possessions after filing for bankruptcy!

Most people are afraid to file bankruptcy because they wrongly believe that they will have to surrender some or all of their possessions once they go bankrupt.  This is not true and has not been true for hundreds of years.  You will usually not have to surrender any possessions after filing bankruptcy in the vast majority of cases.  This is all because of the magic of bankruptcy exemptions and these exemptions have an interesting history.

When you file for bankruptcy a bankruptcy estate is automatically created which includes all of a debtor’s possessions.  These possessions could be sold by a bankruptcy trustee if it were not for the magical exemptions.  Exemptions allow debtors to take their property outside of the bankruptcy estate and keep it for themselves.  A Trustee cannot touch any properly exempted property.  This is what makes bankruptcy so attractive to you when your debt load gets excessively high.

Long ago it was true in England that a debtor had to give up all of his possessions to file for bankruptcy.  This included literally the shirt on his back.  In those days bankruptcy laws required a debtor to turn over all of his clothes to his creditors.  This resulted in public breaches of the peace.  A judge in old England responded with the very first bankruptcy exemption.

This was an exemption for the debtor’s one suit of clothes.  It allowed the debtor to keep his clothes so he would not be forced to break the public nudity laws.  Judges could simply not allow a situation where a person exercised their legal right to file for bankruptcy but in doing so were forced to break another law which was the law against public nudity.

That old decision started the ball rolling and bankruptcy exemptions have been expanding ever since.  Cooking implements were added and then furniture.  Homes were later included in exemptions so people could have a place to live and not forced to be homeless by bankruptcy.  Vehicles were added so debtors could get to work as were tools of the trade,  jewelry, as well as a few others.  In addition to these exemptions at some point in America we added a blanket “wild card” exemption into which a debtor can fit property of any kind.

Currently this wild card exemption is over $23,000.  In it you can protect cash, stocks, bonds, jewelry, collectibles, or any kind of property you see fit.  This is a very generous exemption and it is why most people can keep most of their property in a bankruptcy.  Most of my clients historically do not have assets in excess of this amount and therefore they can file bankruptcy and get rid of most of their debts and they can usually keep all of their assets.

So that is good news for you if you are considering filing for bankruptcy.  Don’t worry about your property.  Just contact a bankruptcy lawyer before you file to get your property properly exempted and you can move on debt free after your bankruptcy discharges.

I am a San Diego bankruptcy attorney.  Please visit my website for more information at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation at (619) 702-5015.

For a free e-book: “13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANKRUPTCY FILING” please send a request by e-mail to: farquharesq@yahoo.com.