What Do I Get To Keep If I File For Bankruptcy?


There is a common misconception that if you file for bankruptcy you lose everything. This is untrue. You lose only what is not exempt. “Exemptions” are assets and property that you are allowed to keep so you can have a fresh start after you file and cannot be seized and sold off. Thanks to exemptions most bankruptcy filers (over 95%) keep most of their property.

How much or what can I exempt?

Each state and the federal government has their own exemption system. If you have a choice of two exemption systems you must select one you cannot mix and match from two. The exemptions have dollar amounts. An important factor in debtors keeping their property is that the value of property is after deduction for any liens or mortgages securing the property. That is to say that if the item is underwater the debtor may keep it.

California exemption systems

California does not use the federal exemption system. California instead has two systems the 703 exemptions and the 704 exemptions. The 704 exemption is commonly used if you have a great deal of home equity. The 703 exemption is used if you have a lot of assets that fit only in the wildcard. The current amounts are below.


Examples showing what you keep

So for example if your only asset is a house with $75,000 in equity you would select the system 1 exemptions and apply the homestead exemption of $75,000. On the other hand if your only asset was $28,000 in jewely you would select System 2 and apply $1,600 in jewelry then apply your remaining homestead of $26,400 to exempt the jewelry leaving $400 wild card remaining.

There are many more exemptions and different factors in valuation and property in the estate. A qualified bankruptcy attorney can help you protect your property.

Asset 704 Exemption – System 1 703 Exemption – System 2
Homestead Real or personal property you live in. $75,000 for single person, up to $100,000 for a family, up to $175,000 if 65 or older or disabled. Real or personal property you live in up to $26,800. The remainder can be used for any purpose. See wildcard.
Car $2,900 for a car $5,350 for car
Personal property Appliances, furnishings, clothing and food Appliance, furnishings, household goods, books, clothing no item more than $675
Jewelry $7,175 $1,600
Retirement Accounts – ERISA 401k, 403b, SEP IRA, Simple IRA, PSP, Keogh, pension, and rollovers to unlimited amounts 401k, 403b, SEP IRA, Simple IRA, PSP, Keogh, pension, and rollovers to unlimited amounts
Retirement Accounts – non ERISA Roth IRA, Traditional IRA up to $1,245,475 total Roth IRA, Traditional IRA up to $1,245,475 total
Wildcard None Remainder of Homestead

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David Seto - Bankruptcy and Disability Lawyer


Email David Setodtseto@gmail.com   

David Seto Lawdavidsetolaw.com



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