You don't have to give up all your assets in a bankruptcy

he bankruptcy process offers debtors a "fresh start." A chapter 7 Bankruptcy gets rid of all your unsecured debts (credit cards, personal loans, and medical bills). A chapter 7 Bankruptcy provides debtors a fresh start if they're overwhelmed by their debts. When your bankruptcy case is over, an individual still needs basic possessions and assets to move forward. The Bankruptcy Code recognizes these basic needs and provides various property exemptions from liquidating their assets for debtors. If property is exempt, it won't be subject to your creditors' claims and it won't be sold at auction by the bankruptcy court trustee.

In California, a Debtor (person filing for a bankruptcy) can exempt (protect) their property under two different sets of property exemptions. The Federal government adopted a set of exemptions for uniform use throughout the United States and they gave the State governments the power to opt in, or opt out of using that list of uniform Federal property exemptions. California decided to opt out of using the Uniform Federal exemptions, and chose to adopt their own set of property exemptions listed under California Civil Procedure Code section (CCP §) 704. The State government of California, however also decided to give their citizens a choice to use the Federal Uniform exemptions, and drafted California Civil Procedure Code section (CCP §) 703, which is identical to the Uniform Federal exemptions.

The exemptions under CCP § 703 allow for an individual in California to exempt up to $21,825 in miscellaneous property. This is referred to as the "wildcard exemption" (CCP § 702.140(b)(5). Under the "Wildcard Exemption" an individual filing for a chapter 7 in California can exempt from liquidation (i.e. retain possession) of $21,825 of misc. things. For example, an individual could file for a bankruptcy and still keep a baseball card collection worth $5000.00, keep a paid off Harley Davidson worth $8000.00, and keep a diamond bracelet worth $8825.00. Furthermore, there is a motor vehicle exemption, which allows an individual filing for a bankruptcy to protect $3,300.00 of equity in one car, in addition to the "Wildcard exemption." So an individual could also protect on top of the items listed above, a paid in full pick-up truck worth $3,300.00. In addition to all of those other exemptions, an individual filing for a bankruptcy can also protect their pension and/or retirement funds (i.e. IRA, 401k). CCP § 703 allow for an individual in California to exempt all of their retirement as long as it is reasonable for their age. Therefore a 55 year old debtor can file bankruptcy and keep all the items listed above, plus they could keep a $80,000 401k they had saved up. On top of all of these other exemptions, the court allows for a person to protect all of their "Household goods," just as long as any one item does not exceed $525.00 in value. However, even if your Television exceeds $525.00 in value, you could still protect it under the "Wildcard Exemption."

Many people are concerned that they have equity in their home; therefore they cannot file a bankruptcy and still keep their house. This is incorrect. Under the bankruptcy laws, a person can protect $50,000.00 in equity in their home. If a homeowner has children in the home under the age of 18, then they can protect $75,000.00 of equity in that home. If the homeowner is over the age of 65, then they can protect $150,000.00 in equity in that home.

Many people think that filing for a bankruptcy will entail liquidating (selling) all of their personal possessions. This is absolutely not true. We here at the Bankruptcy Law Center possess a staff of trained lawyers who are well versed in the exemption laws of California. We know how to protect your property, and still get rid of your debts. Our number one goal is to get rid of your debts, yet allow you to still retain all of your property. The bankruptcy laws have exemptions, which will allow you to keep your property, and we can make sure we use those laws to your advantage. Call the Bankruptcy Law Center today 1-800-551-7922 to set up a free consultation and see whether we can exempt all your property and still discharge all of your debts in a bankruptcy.