Can You File For Bankruptcy And Keep Your Property?
It is a commonly held myth that filing for bankruptcy means you surrender all of your property. Even those who pursue Chapter 7 bankruptcy, which is known as liquidation bankruptcy, are often able to keep most if not all of their property.
Khan Law helps individuals and small businesses in the Tri-Valley and the East Bay area use bankruptcy exemptions to protect their assets.
What is exempt property? It is property that cannot be taken away when you file for bankruptcy.
California Bankruptcy Exemptions
If you have lived in California for at least two years, you can choose to make use of one of two sets of state bankruptcy exemptions.
Our founding attorney, Alia Khan, works with clients individually to determine which set of exemptions is most preferable in their situations. The following are a few of the more popular exemptions, effective as of April 2013. They will be updated in April 2016.
Bankruptcy Exemptions Under Section 703
- Homestead: Protect up to $25,575 in equity in your home.
- Wild card: Protect up to $1,350 equity in any asset. If you do not use the entire homestead exemption, you can use the unused portion as a wild card, too.
- Household furnishings and other goods: You may keep all household goods, clothing and furniture as long as no single item exceeds $650 in value.
- Jewelry: You may keep jewelry that does not exceed $1,525 in total value.
- Vehicle: You are allowed to protect up to $5,100 equity in one motor vehicle. You may use the wild card exemption to protect excess vehicle assets.
Bankruptcy Exemptions Under Section 704
- Homestead: Single people with no dependents may protect $75,000 in equity; families or heads of household may protect $100,000; those 65 and older and those with disabilities may protect $175,000.
- Household furnishings and other goods: You may keep all furnishings, clothing and appliances that are reasonably necessary.
- Jewelry, heirlooms, art: You may keep up to $7,625 worth of these items.
Vehicle: Protect up to $2,900 equity in vehicles.