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What Is Exempt From Bankruptcy?

What Is Exempt From Bankruptcy?
"This article describes the property that can be retained when filing for Chapter 7 bankruptcy in California.

Your nonexempt assets are included in your bankruptcy estate. If you file for Chapter 7 bankruptcy, the trustee can sell the property to repay your creditors. Alternatively, you may acquire this property from your own bankruptcy estate. Your exempt property is the property that you are permitted to retain. You must instead utilize one of California's two exemption systems. This jurisdiction prohibits the use of any federal exemptions.

California residency requirement
To qualify for California exemptions, you must establish residency in the state. This rule prevents individuals from manipulating the system by relocating to states with the most advantageous exemptions. To qualify as a California resident for Chapter 7 bankruptcy purposes, you must have spent at least two years in the state. If you have lived in California for more than 91 days but less than two years, you must use exemptions from the state in which you resided for the majority of the 180-day period immediately preceding the two-year period immediately before filing Chapter 7 bankruptcy.

If you've lived in California for less than 91 days, you can either petition for Chapter 7 in your previous state of residence or wait until you've lived in California for at least 91 days before doing so. If these rules prevent you from qualifying for any state exemptions, you may utilize federal exemptions.

California exemptions under Chapter 7
California is one of only eight jurisdictions with """"bankruptcy-specific"""" exemptions. This means that these exemptions apply only to your bankruptcy case and cannot be used against judgment creditors. In California, filers of Chapter 7 bankruptcy must choose one of the two available systems in its totality; no mixing and matching is permitted. This list is accurate as of 2 February 2012, but it is not exhaustive.

Homestead ($75,000 of equity if single and not disabled; $100,000 for families if no other member owns a home; $175,000 if 65+ OR disabled); disability or health benefits, most forms of tax-exempt retirement accounts, motor vehicle up to $2,725, and no wildcard.
System 2 prohibits married couples from doubling exemptions. Homestead exemption up to $22,075; disability benefits; alimony, child support; motor vehicle exemption up to $3,525; no wage exemption; wildcard exemption of $1,175 for any property.

Before filing for Chapter 7 bankruptcy, resist the temptation to give away your property to relatives, acquaintances, or your favorite creditor. Creditors are entitled to equitable and equal treatment, and the trustee in bankruptcy has the right to reclaim this property. However, there is nothing improper about engaging in nonfraudulent pre-bankruptcy planning that maximizes available exceptions.""

" - https://www.affordablecebu.com/

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"What Is Exempt From Bankruptcy?" was written by Mary under the Finance / Wealth category. It has been read 99 times and generated 0 comments. The article was created on and updated on 01 June 2023.
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