Bankruptcy Exemptions - What Things Can You Claim As An Exemption When Filing?
Author: William Perry
What are bankruptcy exemptions, and how are they determined? First off, these are only for individuals filing for bankruptcy and not businesses, and they are something that allows you to keep up your standard of living by protecting some of your personal possessions from being taken by the court to pay off your debt.
As I'm sure you are aware, in bankruptcy what often happens is that the court will take away your possessions to liquidate them and pay off your debts. Knowing what the court can take away and what they can't is very important to determining whether or not you should file for bankruptcy.
If they can take away basically everything you own, then obviously filing is a bad decision. However, if a lot of your things fall under bankruptcy exemptions, then it might be a smart thing to file, and get rid of your debts so that you can start over.
The way it works is, you can sometimes choose between the state and national bankruptcy exemptions, in the case of states who allow national exemptions. Each have their own rules on what can be considered an exemption and what cannot be.
However, often times, you must go with the state exemptions, as certain states (the majority, actually) don't allow national exemptions to apply to them.
It's a long story, but for now that's the way it is, and I will leave it at that. If you live in a state that allows national bankruptcy exemptions, you have to decide on which rules you want to go with, and can't just take portions of each that apply to you. You have to choose one or the other.
This is basically how it works. First, when you claim something as a bankruptcy exemption, you have to show the value of it right now, and not when you first obtained it, since this is obviously the amount the court will get for it by selling it.
There are only certain things that can be claimed, of course, otherwise why not just keep everything? Since each state is different, for the purpose of this article I will cover the more prominent of the federal exemptions.
First, the equity of the main residence you live in is exempt for up to ,400, and you can use this money to live somewhere else once you lose your current place. Pension and retirement plans can also be claimed should you claim them, life insurance that is at least 00, and also unemployment benefits can't be taken as well if you claim them.
There are quite a few other smaller things, and of course, your lawyer will be able to give you an extensive list, so that you can determine what you will have to lose and what you can keep. Remember, this only applies to chapter 7 bankruptcy, as with chapter 13, the individual follow a court ordered payment plan, and you aren't discharged of your obligations, as you are with chapter seven.
Your lawyer will be able to help you with bankruptcy exemptions, so while this is an introduction to the topic, it is no substitute for a competent attorney who can explain to you the ins and outs of this somewhat complicated topic.
Article Source: http://www.articlesbase.com/finance-articles/bankruptcy-exemptions-what-things-can-you-claim-as-an-exemption-when-filing-771180.html
About the Author
Trying to decide whether or not to file for bankruptcy? Determining the bankruptcy exemptions you can claim is a good start. Also, for little known secrets on getting the best court deal and most importantly, achieving financial success, check out http://www.onlinebankruptcytips.com
Can I use the county tax assessed value of my home when filing a Ch 7 bankruptcy in California?
I consulted an attorney re: filing a chap 7 and was told it may not be a good idea based on the value of my home. They used the website Zillow.com to get the estimated value of my property. My property was given a range of $303k to $390k, with a estimate of $349k. This value would put me over the CA equity exemption amount of $75k. Is this a reliable valuation? I am hoping to avoid the trustee questioning the value and forcing me to sell my home to pay off debts. Any suggestions on where to get a value that can be used? County tax assessed value? The assessed value is considerably lower than the value found on Zillow. Appraiser? I don’t have the cash to dish out for an appraisal but would rather be safe than sorry. Also, another attorney said that the value of my home shouldn’t have changed much since I purchased a year ago and that we could use the purchase price. I get the feeling he’s misleading me. Any help would be greatly appreciated. Thanks.
Someone explain this one to me?? ?
How was my response a violation any help here??? The funny thing is I cut and pasted the news story from yahoo news!!!!
Hello dez604 (dez604)
You have posted content to Yahoo! Answers in violation of our Community Guidelines or Terms of Service. As a result, your content has been deleted. Community Guidelines help to keep Yahoo! Answers a safe and useful community, so we appreciate your consideration of its rules.
Question: McCains son in a banking scandal?
Question Details: The bank lost $73M while Andy McCain sat on the auditor board. He quickly resigned. How will this sit with voters? http://online.wsj.com/article/SB121876461747243159.html?mod=googlenews_wsj
Deleted Answer: Don’t you mean Joe Bidens Kid??? WASHINGTON – A son of Democratic vice presidential candidate Joe Biden was paid an undisclosed amount of money as a consultant by MBNA, the largest employer in Delaware, during the years the senator supported legislation that was promoted by the credit card industry and opposed by consumer groups. ADVERTISEMENT Barack Obama’s presidential campaign said Biden helped forge a bipartisan compromise on the measure, which is now law and makes it harder for consumers to obtain bankruptcy protection in the courts. MBNA’s consulting payments to Hunter Biden, first reported by The New York Times, followed his departure in 2001 from the company, where he had been an executive. Obama opposed the bankruptcy law, enacted in 2005, while Biden supported it. David Wade, a spokesman for the Obama campaign, said that “after working in the Clinton administration in the Department of Commerce on Internet privacy and online commerce issues, Hunter consulted for five years as an expert on these very same issues at a time of enormous expansion in online banking.” At the time Hunter Biden was receiving consulting payments from MBNA, he also was a Washington lobbyist at a firm he had co-founded. “He was not a lobbyist for MBNA, and his work had absolutely nothing to do with the bankruptcy bill. Zero. Nothing,” said Wade. Resurrecting Biden’s role in the bankruptcy legislation could undercut one of the Obama campaign’s lines of attack: That his Republican opponent, John McCain, is insensitive to the financial woes of middle-class Americans. Consumer and civil rights groups and unions, as well as Democratic opponents, had argued that the bankruptcy legislation was unfair to low-income working people, single mothers, minorities and the elderly, and would remove a safety net for those who have lost their jobs or face mounting medical bills. The financial services industry made the case that bankruptcy frequently is a refuge of gamblers, impulsive shoppers, divorced or separated fathers avoiding child support, and multimillionaires who buy mansions in states with liberal exemptions to shelter assets from creditors. When the Senate Judiciary Committee approved the bill early in 2005, Biden, Dianne Feinstein of California and Herb Kohl of Wisconsin were the only Democrats to vote with the Republican majority. Biden also voted for the bill on final passage in the Senate, while Obama voted against it. MBNA employees have poured more than $200,000 into Biden’s Senate campaigns over the past two decades, making donors working for the credit card company the senator’s largest source of campaign money. On the bankruptcy bill, the senator “took plenty of knocks from the largest employer in his state because he demanded changes,” said Wade, the Obama campaign spokesman. “Sen. Biden improved the bill for low-income workers, women, and children. There were times when he believed amendments on both sides would have blown up a bipartisan compromise backed by three quarters of the Senate. At those moments, Sen. Biden had to make the tough calls and he voted to pass a bill.” In a separate matter in which Hunter Biden’s lobbying activities were referenced, he and Biden’s brother Jim have been sued for allegedly defrauding an ex-business partner. In the lawsuit filed last year in state court in New York, Anthony Lotito says that he got a call from Jim Biden in early 2006 saying that Sen. Biden was concerned with the impact that Hunter’s lobbying activities might have on the senator’s expected campaign for the 2008 Democratic presidential nomination. According to the lawsuit, Jim Biden said his brother had asked him to seek Lotito’s assistance in finding employment for Hunter in a non-lobbying capacity. The lawsuit says that Lotito later was cut out of a business arrangement with Jim and Hunter Biden to purchase a Wall Street hedge fund. Nicholas Gravante, a lawyer for the Bidens, said that Lotito’s claim that Sen. Biden told his brother that he was concerned about his son’s lobbying activities is completely baseless. “There is absolutely no connection between Joe Biden and this lawsuit. The case is without merit and it will be dismissed,” said Gravante, a partner at the firm of Boies, Schiller & Flexner.
Violation Reason:Not
Nightmare started with fraudulent support order. I was jailed for 35 days. I filed for bankruptcy 3/10/1999.?
Why is there injustice in the name of child support?
…make a call, fax or write a letter, twit, blog, etc, etc…
I am a father of two children who spent 50% of my time between California and Maryland. I want to do right by my children. But after the divorce my nightmare started with a family support order that was found to be fraudulent by the Federal Bankruptcy Court.
The DA of the County of Santa Clara California (DA hereinafter) testified that I was making $6,000 a month, while I was unemployed. I was imprisoned for 35 days based on that fraudulent order.
I filed for chapter 7 and chapter 13 bankruptcy protection. I had equity on three properties. Around 3/10/ 1999, the DA filed a claim for $115,000.00 to enforce pre petition child support arrears. The Bankruptcy Court denied the DA’s motion. The court also ordered a new family support court be entered.
In 2000 my children and I were evicted from my home, 10 days after I filed for bankruptcy protection in violation of the automatic stay. We left with just clothes on our back and few personal items. I did not receive a penny for home owner exemption either.
Since 2000, a new support order was entered by the family court. It should be $250, but the DA had my wages garnished for $850 a month. My wages are still garnished to this day, even though my children are now 20 and 19 years old.
The DA has sent letters making me look like I am a dead beat dad owing $115,000.00 in child support arrears. The DA has intercepted nine years of my tax refunds. The DA has also taken a little money I saved for rainy days. The DA emptied all my bank accounts including the last one just a couple a months ago.
I had not one, not two but all three of my properties foreclosed while I was under bankruptcy protection. The DA took over a million dollar from the proceeds of the three trustees’ sale. But the DA acknowledges taking only $80,000. I am homeless since 2000. I live in hotels. My credit is in the dump.
It has been over a year since I moved to Maryland. But the DA refuses to transfer the case file to Maryland. The DA sent letters to the passport office to prevent me from renewing my passport. I need my passport for work and for family emergency to Africa where half of families still reside.
The DA refuses to this day to send me monthly or annual statements. In September 2007, I received a letter stating that I still owe $145,000.00. I received another letter, from DA of Maryland, stating that I owe less than $4,000.00. The numbers do not add up.
I am grateful to be a US citizen, Christian Democrat, first generation African American, Capricorn & born the same day as Denzel Washington. I came from East Africa, educated in France with a BS in Mathematics and an MSEE.
I know I am not the only father to be treated like this. But I hope no other child have to endure this kind of treatment again.
So I hope you raise awareness on this issue, since 50% of marriages end up in divorce in the USA. It is easy to imagine the mental and emotional damages to children at such a tender age. This should not happen in the USA.
I hope you can help end this ten years nightmare. I hope that you make a call, fax or write a letter, twit, blog, etc, etc…
Information to write, fax or call to the Departments:
California Department of Child Support Services
P.O. Box 419064
Rancho Cordova, CA 95741-9064
Customer Service (916) 464-5050 or 1-(866)-249-0773
Facsimile (916) 464-5065
Internet: http://www.childsup.cahwnet.gov/
Montgomery County Office of Child Support Enforcement
51 Monroe Street, Suite 811
Rockville, Maryland 20850
Customer Service 1-800-332-6347
Facsimile 301-610-7258
I am calling the numbers. I will send faxes. I will also send hard copies to California and Maryland. I hope that you do the same. I know that each person can make a difference to one child at a time. Only that will bring a change so that no other child has to endure this kind of treatment again.
I hope justice will prevail. But no matter what happens, I am proud to be living in America where Barack Obama is president. I know in the USA: the impossible is possible.
God bless America.
Does anyone know what to expect in Bankruptcy Ch 13 in the state of California ? I’m scared need advise”?
my property has too much Equity, my attorney filed a Bankruptcy Chapter 7, & later on after filing for ch 7 our attorney realized that our equity is high so then he asked me & my husband 2 convert 2 Bankruptcy CH 13, this alarmed us, We are so comfused & scared more than ever, We are current with our primary Mortgage & 1st & 2nd Loan with our Bank that is tied up with our property, our balance is $ 129,000.00 & our Appraisal is for $295,000.00 & we are current with our Property Taxes/Homeowners Insurance. & we are current with our car payment & auto insurance. Our reason 2 File for Bankruptcy in the 1st place was because of personal credit card debts, we were told from our attorney that we do qualify for CH 7, Now our attorney tells us we do not qualify for ch 7 so we have to convert to CH 13, but he says our home is not secured with the $100,000.00 Home Exemption. our children are all Adults, even though they live with us, & we support them financially the court does not reconize my college children as our dependents under the law and because 2 of them file for thier own tax-return for years now so I only have one adult dependent age 18 who is still a full-time student in High School. another thing the lawyer said 2 us when after we signed the forms for ch 13, last week friday. that we qualify for a 100% Pay Back Plan. not reduced like they do for Consolidation, & not even once did the lawyer mention anything about consolidation so I am really comfused, I even asked an attorney at the Pro-Bono work shop @the Santa Ana Bankruptcy Court House 2 weeks ago & I asked if its safe to convert my case to a ch 13 to keep my property & personal property safe they said yes, & that I would have to pay what I could only afford a month from my husbands income for a 5 year plan”so I thought ok, this is good” But, when I saw my lawyer last week 2 sign 4 the convertion to a CH 13, she said my minimum payment would be around $1,000.00 a month 2 pay back my creditors & that’s the lowest payment the court would offer according to our attorney 2 start with & it will go higher in a couple of months “We can’t afford this” what should we do? this attorney is confusing us, my English is fluent but, the legal terminology is very confusing” if you have been through something like this before (or) if you know someone that had gone thru this in CA we would really appreciate any feedback you may offer, I tried 2 call my attorney again & she does not return calls I am scared for me & my family. Thanks 4 listening hope 2 hear from someone that would have knowledge to give us feedback that is true no matter how bad it ism we want to know what to expect & what we should do.
Mary:
Orange County, CA, USA
A couple things for you to consider:
1) Sites like realestateabc.com and zillow.com do *NOT* give market values as estimated by an appraiser. These sites spit out comps in the area and give a ballpark estimate of what a home *might* be worth. However, federal regulations dictate that appraisals can only be done by licensed appraisers. Therefore, these sites to *not* give true market values.
2) The county assessor does *NOT* keep record of the market value of a house. They estimate assessed values…which are solely used to estimate the real estate taxes of a property. These values are not market driven. They are usually much lower than the actual market value of the property.
3) Considering that you’re in California, the price that you purchased the property may or may not be a reliable indicator of value. The housing market in California has slowed considerably. I’m not sure which area of California you’re in…some markets have continued to show some minor levels of appreciation; others may have some minor levels of price decreases. An appraiser (not an attorney) in your market would be able to best inform you what the market trends in your area have been like over the past year.
Since you’re going through a Chapter 7, you should discuss these issues with your attorney to decide what would be the best course of action in your case. An appraisal may be in order to determine the current market value of your home.
On a personal note…if I were you, I’d try to avoid filing for bankruptcy at all costs. I went through a bankruptcy 5 years ago and am *still* trying to get my credit back up to par. I’ve kept all my post-bankruptcy lines of credit clean and it has taken this long to get my credit score up to an “average” rating. It’s a huge black mark on your credit and will remain on your credit up to 10 years. I’m not sure what your personal situation is like…but if you’re looking for an easy fix to credit problems, a bankruptcy is not that easy road. If you decide to file, you should do a lot of research so you are fully aware of all the consequences that come with filing bankruptcy (denial of credit applications, outrageously high interest rates, a significant impact on your credit score, etc).
As I said, I’m 5 years post-bankruptcy and I regret my decision to file bankruptcy every single day. All I can do is suck it up and anxiously await the day that it will be removed from my credit reports (another 5 years and counting!)
There is something about your story that is troublesome. It sounds like either you have a very inexperienced bankruptcy attorney, or there is more to this than what you have disclosed in your question.
Your adult children who are in college should file amended FAFSA forms and make appointments o talk with their college financial aid officers. Your Ch 13 may reduce the “expected family contribution” which may increase their eligibility for financial aid.
Why will your Ch 13 payment increase in a couple of months? YOU (or your attorney, on your behalf) write your Ch 13 repayment plan and present it to the court for confirmation. The court does NOT write your Ch 13 repayment plan. YOU do. There are constraints, all of which must be met. But if you do not want a Plan that calls for an increase “in a couple of months” then do not submit a Plan that proposes this. In fact, that is fairly unusual. Most Ch 13 Plans call for equal payments over the life of the Plan. I do not know, and am having trouble guessing, why your attorney would write a Plan that proposes this. Most Ch 13 Plans do not.
I also wonder whether your bankruptcy attorney is experienced enough to perform the Means Test correctly using Form 22c which is the Long Form of the Ch 13 Means Test. Many inexperiencd attorneys only use the short form of the means test, which can be a disadvantage to the debtor.
Usually if you have a 100% repayment Plan, it is because you have equity that you could not protect in a Ch 7 with the available exemptions. That is why you are converting your Ch 7 to a Ch 13 — because your equity in the home exceeds the available $100,000 exemption. It is somehow troublesome that your attorney did not realize this before filing the Ch 7, unless the appraisal was done after the Ch 7 was filed or unless you tried claiming your adult children as dependents and that was disallowed after you filed. Was the appraisal done recently or are you using an old appraisal figure? If it is old, you might want to get a newer appraisal since property values have dropped in many areas. Your appraisal would need to come in under about $235,000 in order for you not to have an excess equity issue.
If I were you, I would make an appointment with a second bankruptcy attorney for a complete review of the case and a second opinion. You will need to pay for this, but it might be worth while to get a second, experienced, pair of legal eyes taking a detailed look at the case.
During this political season, questions of this caliber are going to be raised and deleted by both sides, as the more unpleasant aspects are goping to be ignored