What Kind of Unusual Assets Are Exempt in a Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy essentially eliminates debt for the filer but requires liquidation of assets. In other words, federal law dictates that most of what the filer owns must be sold off to pay creditors some fraction of what is owed. Even though the net value of these assets may not meet all debts, the filer is protected from further claims from creditors.
However, each state determines what the filer can keep after the bankruptcy as a means of picking up and starting life anew. Some of these exemptions are modern – allowing for a homestead value of $100,000 or more in some states, reflecting the rise of home values in recent decades – while other exemptions reflect a cultural regard for what is essential in life (and death) under circumstances of financial duress.
Here is a sampling of those unusual asset exemptions:
- Alabama: A burial place and church pew or seat
- Alaska: Building materials and liquor licenses
- Arizona: Food and fuel for six months
- Arkansas: Wedding rings, burial plots up to five acres (certain conditions apply), prepaid funeral trusts and clothing of unlimited value
- California: Public employee vacation credits and jewelry, heirlooms and art worth up to $7,175
- Colorado: Bicycles and motor vehicles used to travel to work, up to $5,000
- Connecticut: Spendthrift trust funds needed for support and tuition savings accounts
- Delaware: Pianos, leased organs, sewing machines
- Florida: Prepaid hurricane savings accounts
- Georgia: Animals and crops up to $300 per item and $5,000 total
- Hawaii: burial plot up to 250 square feet, plus on-site tombstones, monuments and fencing
For a full understanding of how you would fare in a bankruptcy, contact a qualified bankruptcy attorney.