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As per the wildcard exemptions, you are entitled to protect any 1 property or asset which can be excluding your house. A wildcard exemption is mainly used to protect a luxury asset or a product of sentimental value. For example your Grandmothers’ Piano or your Childhood Childhood Cards.
Bankruptcy Exemptions – An Overview on how they work
Each state has its own set of exemptions. However, some states allow the citizens to choose between state or federal exemptions, but you can only choose from either one and not both.
Each exemption protects a particular property or asset. For example, a motor vehicle exemption can only be used to protect your car or another motor vehicle, however, it cannot be used to protect money in your bank account.
Details of Federal Bankruptcy Exemptions-
- $25,150 equity in residential property
- $4,000 on car or Bike
- $625 max per Household Item – furnishings, clothing, appliances, bed, tools etc. Total $13,400 Cap
- $2,525 for business or profession related tools
Depending on the bankruptcy chapter you file under, the actions on your non-exempted property will be determined-
- Chapter 7 – if you file for bankruptcy under chapter 7 and cannot get your property exempted, then in such a scenario, the trustee will be appointed to sell your property and use the balance after paying you the equity to pay off the creditors.
- Chapter 13 – If you file for bankruptcy under chapter 13, you do not have to foreclose or surrender your property. However, you will need to pay off the value in a planned 3-5 years repayment plan.
You can select the property you want to protect under wildcard exemption
There is no limitation on the property that you want to protect under wildcard exemption. You can use this benefit to protect your luxury car or an asset of sentimental value. You can also split it between multiple assets.
The value of Wildcard Exemptions
Wildcard exemptions are not available if you file for bankruptcy in any state, they are available only in selected states, and even for such states, the value may vary state to state. You can also avail of this facility under the federal bankruptcy scheme as well.
- Federal Wildcard exemption – As of April 2019, the value for federal exemption is $1,325. Along with this, you can combine the unused value of the federal homestead exemption up to $12,575. If you are filing under joint bankruptcy, this value will be doubled. People residing in – New York, Massachusetts, Connecticut, New Jersey, Rhode Island, New Hampshire, Michigan, Kentucky, Hawaii, Alaska, Texas, Washington, Minnesota can avail benefit of federal bankruptcy exemptions. People residing in other states are not yet permitted to claim benefits under federal exemptions.
- State Wildcard Exemptions – Wildcard exemptions value varies from state to state. Therefore you will need to check the exemption decree of your state to understand the value that you can protect.
The biggest mistake people nowadays make is to not consult a professional bankruptcy attorney before they file for bankruptcy. This can cost you a lot to the extent of losing your property. If you aren’t sure of how to go ahead, book an appointment today with the experienced – 888-297-6203