The bankruptcy laws were recently changed and federal legislation enacted by Congress. The new laws governing bankruptcy set a standard, which benefits the creditors. Although Congress did allow some states the option to create their own laws governing federal exemptions in bankruptcy laws. The choice between federal or state guidelines in done in sixteen states.
The states that follow the federal guidelines are:
Arkansas New Mexico
Rhode Island District of Columbia
South Carolina Hawaii
Minnesota New Jersey
When you think about the exemptions, you have to include the value of the property today, not the value when you bought the asset. If you are married and filing jointly this value doubles.
Federal exemptions in bankruptcy laws are a touchy subject and since the changes have occurred, many do not understand the bankruptcy laws anymore. They have become a bit more complex.
Some of the federal exemptions in bankruptcy include the following:
The equity in your primary home is exempt up to seventeen thousand four hundred dollars. You may use up to eight thousand in home equity for other property including a cemetery plot.
You can claim exemption for pension and retirement plans that is needed for support.
Life insurance worth ninety-three hundred dollars, disability payments, and life insurance you pay for another person and any insurance contracts are covered under the federal exemptions in bankruptcy.
Any benefits you get for public assistance including unemployment benefits, and monies received from crimes victims.
The other federal exemptions in bankruptcy include:
Pet, animals and crops
Clothing and up to eleven hundred dollars in jewelry
Books and household goods
Appliances and furnishings
Musical instruments and a car valued up to twenty-seven hundred dollars
Any personal injury payments up to seventeen thousand four hundred dollars except what was for pain and suffering
Alimony and support payments