|
|
| What Property is “Exempt” from the Bankruptcy Court? |
- Introduction.
When you file bankruptcy, all your assets become an asset of your “bankruptcy estate.” In Chapter 7, you get to pull back and keep everything that is not “exempt.” The Chapter 7 trustee could sell everything that is not exempt to give money to your creditors. In Chapter 13, you keep all of your property, but you must pay your general, unsecured creditors at least as much as the value of the non-exempt property. Remember: if the property isn’t worth much, the bankruptcy trustee does not want it. If it is over-encumbered (you owe more on something than it is worth), the trustee has no use for it. This accounts for most property people own. Joint Debtors (husband and wives who file bankruptcy together) can each claim an exemption.
Click here for help valuing your used cars.
Click here for help valuing your recreational vehicles, motorcycles, and boats.
- Iowa Exemptions.
Each Debtor can claim the following as exempt:
Wearing apparel: $1,000
All jewelry: $2,000
Wedding/engagement ring(s): up to $7,000
Household goods & furnishings: $7,000
One automobile: $7,000 net equity
Accrued wages & tax refund(s): $1,000
Cash on hand, bank deposits or other personal property: $1,000
Interest in payments resulting from wronful death - Unlimited
Worker's Compensation payments - Unlimited
Social Security, Welfare and Unemployment benefits - Unlimited
Qualifying pension plans - Unlimited
IRA's - up to $1,000,000
There may be other exemptions available.
- Illinois Exemptions.
Each Debtor can claim the following as exempt:
Homestead: $15,000 of equity
Personal property: $4,000
Car: $2,400 of equity
Personal injury awards: $15,000
Pensions: 100%
IRA’s: 100%
Worker’s Compensation awards: 100%
Social Security/Disability payments: 100%
There may be other exemptions available.
- Change in the Law for Exemptions: October, 2005.
Perhaps the biggest change in the law in October, 2005, was as follows: before the law, you applied the exemptions for the state you have lived in for the greater part of the past 180 days. Under the amended law, if you have moved from one state to another state any time in the past two years, you have to go back and look at the state where you lived, two years ago, and then determine what the state was that you lived in for the greater part of 180 days before that date. And, some states do not let you use their exemptions, if you are not a current resident. In those cases, you get to claim a third set of exemptions which are “Federal exemptions.” All of this is very complicated. The upshot is that, if you’ve moved from one state to another in the past 2 years, you need to talk to your attorney about how this affects you.
| |
