What do I get to keep in a bankruptcy?


What do I get to keep in a bankruptcy?

Letter to “Ask Leon”

Dear Leon:
What do I get to keep if I file bankruptcy? Any advice you can give would be appreciated.

Leon Says…

Dear Chris: Without realizing it, you have turned a very simple question into something that is quite complicated. This question would be very easy to answer if I knew what you owned, then I could tell you if there is something you have that would not be protected. But, to give you a very general idea, here goes: Assuming the person lives in California, (Federal Bankruptcy law is uniform, meaning it is the same in all states, except that the Federal law yields to state law on the issue of what you get to keep), it is very rare that a person would lose anything. This is because the law is extremely generous about letting you keep your property. For example, a single person can protect at least $50,000 of equity in his or her home, a married person can protect $75,000 of home equity, or if the person is elderly or disabled, as much as $125,000 of equity; plus numerous other generous exemptions for many different kinds of personal property, such as household goods, money in certain retirement plans, automobiles, and if you don’t have home equity to exempt, there is a very generous floating exemption that allows an additional $17, 425 of protection for anything else you may want to keep. Most people won’t ever lose anything to the court, but a few do. The best way to know for sure is to consult with an experienced bankruptcy attorney in your own state. Incidentally, this is probably the most common problem that blows up on people who file their own bankruptcy case without an attorney. I have even seen people lose things to the court that could have been protected, because their legal papers were not done correctly.

By |2012-10-09T06:08:48+00:00October 9th, 2012|bankruptcy-faq, Financial|0 Comments
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