One of the biggest myths about filing bankruptcy is that all of your “stuff” will be sold to pay off your creditors. In truth, in a Chapter 7 bankruptcy, there are a variety of exemption categories that can be used by our clients to protect property from their creditor(s). Further, 17 states, including Wisconsin, allow debtors to choose whether to use the federal and their state bankruptcy exemptions. And while some exemptions have specific exemption values, others do not. For example, here are a few of the categories in the Federal Exemptions. And remember, in cases where both spouses are filing, these amounts are doubled!
- Homestead Exemption: Protects $22,975 of equity in your principal place of residence. Cannot be used on investment or rental property.
- Support or Benefits Exemptions: Includes alimony, child support (reasonably necessary for your support), life insurance payments, social security, unemployment benefits, veteran’s benefits, public assistance, and disability or illness benefits.
- Personal Injury Exemptions: Up to $22,975, and includes monies recovered for personal injury (except pain and suffering or pecuniary loss), loss of future earnings, wrongful death, and crime victim compensation.
- Workers Compensation Payments: unlimited
- Retirement Account Exemptions: Unlimited on ERISA qualified accounts, with a cap $1,245,475 on IRAs and Roth IRAs.
- Personal Property Exemptions. Includes,
- Motor vehicle: $3,675,
- Household goods, furnishings and appliances, clothes, books, animals, crops, or musical instruments: no more than $575 per item and $12,250 total,
- Jewelry: $1,550,
- Trade Tools &Books: $2,300,
- Life insurance policy that hasn’t matured. Not applicable to credit life insurance policies.
- Loan value of a life insurance policy: $12,250.
- Health aids: Any value.
However, in my opinion, the most helpful exemption is the “Wildcard Exemption”. This allows us to protect up to $1,225 in any item (even cash in a bank account), plus we can use any unused portion of the homestead exemption, but no more than a total $11,500.
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Contact the “Milwaukee Foreclosure and Bankruptcy Attorneys,” DeLadurantey Law Office, LLC. DeLadurantey Law Office, LLC focuses on Chapter 7 and 13 bankruptcy, debtor’s rights, debt negotiations, debt relief, mortgage loan modifications, and foreclosure defense. A “defender of the little guy,” DeLadurantey Law Office, LLC serves the following location – Milwaukee, South Milwaukee, West Milwaukee, Waukesha City, Waukesha Town, Kenosha, Racine, and all other municipalities in Milwaukee County, Waukesha County, Kenosha County, and Racine County.
DeLadurantey Law Office, LLC: (414) 377-0518.
Designed for attorneys who would like to expand their practice into bankruptcy litigation or are a civil trial lawyer trying to protect the client’s interests when pending suits are thrown into the bankruptcy arena.
Wednesday, September 11, 2013 10-5 est