Bankruptcy Exemptions

Federal bankruptcy law allows you to exempt some property and benefits from the bankruptcy estate. Using the exemptions can save some of your assets in order to continue to live after the bankruptcy case is complete.

You are allowed to choose between state and federal bankruptcy exemptions in Arkansas, Connecticut, Washington D.C., Hawaii, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, Pennsylvania, Rhode Island, Texas, Vermont, Washington and Wisconsin.

Your attorney should review the federal and state exemptions available in these states with you so that you can make an informed decision as to which is best for your case. Also know that the federal exemptions can be doubled by a husband and wife filing together.

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Here is a list of the federal exemptions as of August 2007.

Homestead: Real property, including burial plots or mobile homes and co-ops, up to $20,200. Unused portion, up to $10,125, may be used for other property.

Personal Property: Motor vehicle up to $3,225. Animals, crops, clothing, appliances and furnishings, books, household goods and musical instruments up to $525 per item, and up to $10,775 total. Jewelry up to $1,350. $1,075 of any property and unused portion of homestead up to $10,125. Health aids. Wrongful death recovery for person you depended upon. Personal injury recovery up to $20,200 except for pain and suffering or for pecuniary loss. Lost earning payments.

Pensions: Tax exempt retirement accounts; IRAs and Roth IRAs up to $1,095,000 per person.

Public Benefits: Public assistance, Social Security, Veteran’s benefits, Unemployment Compensation. Crime victim’s compensation

Tools of Trade: Implements, books and tools of trade, up to $2,025.

Alimony and Child Support: Alimony and child support needed for support

Insurance: Unmatured life insurance policy except credit insurance. Life insurance policy with loan value up to $10,775. Disability, unemployment or illness benefits. Life insurance payments for a person you depended on, which you need for support