The bankruptcy laws were changed recently and federal legislation introduced by Congress. The new laws governing bankruptcy introduced a standard, to benefit the creditors. Although Congress did give certain states the choice to design their own laws concerning federal exemptions in bankruptcy laws. There are 16 states offering a choice between federal or state guidelines.
The states adopting the federal guidelines are:
- Arkansas New Mexico
- Connecticut Pennsylvania
- Rhode Island District of Columbia
- South Carolina Hawaii
- Massachusetts Washington
- Wisconsin Vermont
- Minnesota New Jersey
- Texas Michigan
While thinking about the exemptions, you should consider the value of the property today and not the one when you first purchased it. For the married couple, filing together, this value doubles.
Federal exemptions in bankruptcy laws are a complex topic and as there have been changes in these laws, they are beyond the understanding of most. They have become slightly more complex.
Few of the federal exemptions in bankruptcy consist of the following:
The equity in your primary home is exempted till $17,400. You can use maximum of $8000 from home equity for other property like a cemetery plot.
You can avail of exemption for pension and retirement plans required for support.
Life insurance up to $9300, disability payments, and life insurance you pay on behalf of someone else and any insurance contracts can be included under the federal exemptions in bankruptcy.
Benefits received from public assistance like unemployment benefits, and payments obtained from crimes victims.
The other federal exemptions in bankruptcy consist of:
- Pet animals and crops
- Clothes and jewellery whose worth does not exceed $1100
- Books and household items
- Appliances and furnishings
- Musical instruments and car worth up to $2700
- Personal injury payments till $17,400 except those for pain and suffering
- Alimony and support payments
Tags: Bankruptcy, Federal Exemptions