What is an Exemption?
An exemption is a rule that helps you keep certain
property such as a wedding ring or a car. Depending on the particular exemption
rule, you may be able to save an entire item. Your attorney will review your
list of property to see how much of it can be saved in the Bankruptcy process.
According to 11 U.S.
11 U.S.C. §§ 506 and 527(b), debtors and attorneys need to value an item based
upon what a retailer’s price for the same item would be. Some good sources for
comparing items of the same age and condition are the Kelly Blue Book, eBay, and Amazon. You need to determine an
accurate replacement value for any item you hope to keep.
Married Couples May Double Certain Exemptions
Missouri allows married couples to double certain
exemptions such as the one for cars. Missouri allows a $3,000 exemption for
cars, but married couples can take a $6,000 exemption. Unfortunately, Missouri
does not allow married couples to double the Homestead exemption which protects
the equity in your home.
If the Trustee feels that a certain non-exempt item will
not fetch enough at auction, you may be able to keep it. This decision is made by the Trustee, and is
made on a case by case basis.
In a Chapter 7 Bankruptcy, the Bankruptcy Trustee sells
any property you own and in exchange you can get a fresh start. The Bankruptcy
Trustee will sell anything you own outright to your creditors or others.
However, exemptions may help protect your property.
For example:
Sheila is
unmarried, and filing for Chapter 7 Bankruptcy in Missouri. Sheila owns her own
car free and clear of any loans. Sheila owns a 1997
Acura CL 2.2 Coupe 2D with 95,000 miles that has a Blue Book value of $1,684.
Missouri has a $3,000 exemption for cars, and Sheila’s car is worth less than
$3,000 so the car is SAFE due to Missouri Bankruptcy exemption laws.
In a Chapter 13 Bankruptcy, the Bankruptcy Trustee works
with you to reduce your debts so you can pay your creditors in either a 3-year
or 5-year period. Also, in a Chapter 13 you get to keep your property, but you
must use all of your disposable income to pay your creditors. The law requires
that your creditors get just as much money as if you had filed a Chapter 7
Bankruptcy.
Your Bankruptcy Trustee will calculate the value of your
non-exempt property.
Commonly Used Missouri Exemptions include but
are not necessarily limited to:
Household Furnishing, Household Goods, such as wearing apparel, appliances, books, animals, crops or musical instruments that are held primarily for personal, family or household use of such person or dependent of such person: $3,000.00.
Household Furnishing, Household Goods, such as wearing apparel, appliances, books, animals, crops or musical instruments that are held primarily for personal, family or household use of such person or dependent of such person: $3,000.00.
Wedding Ring: $1,500.00.
Other Jewelry held primarily for the personal, family or household use of such person or a dependent of such person: $500.00.
Any Motor Vehicles (Cars): $3,000.00.
Homestead (if you own your house): $15,000.00.
Wild Card: You can save any property up to $600.00 limit per person.
Each personal bankruptcy situation is unique. Bankruptcy can give a debtor a fresh start while saving some personal items.
If you reside in the St. Louis, Missouri or Jefferson County, Missouri area and are considering bankruptcy and believe you may qualify, please contact The Schwent Law Firm at (636) 937-4994 to set up an appointment to met with our Bankruptcy Attorney at our Festus, Missouri law office. We will be happy to assist you.