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  Federal Bankruptcy Exemptions -

     Under Bankruptcy Code Section 522(d), there are 12 types of property can be claimed as exempt in states which have not "opted-out" of the federal exemption scheme. The dollar amount of the exemptions can change periodically depending on cost-of-living increases. They are as follows:

 1).  $ 21,625 of equity in the debtor's principal residence
 2).  $ 3,450 of equity in an automobile
 3).  The debtor's interest, not to exceed $ 550 in value in any particular item, and up to an aggregate of $ 10,825, of household goods, furnishings, wearing apparel, books, animals, crops, appliances, musical instruments, which are held primarily for the personal, family or household use of the debtor or his dependents
 4).  $ 1,450 worth of jewelry held primarily for the personal, family or household use of the debtor or a dependent of the debtor
 5).  Debtor's interest in any property up to $ 1,150, plus any unused amount of the homestead exemption of (1), above, but not to exceed $ 10,825
 6).  $ 2,175 worth of implements, professional books, or tools of the trade of the debtor or the trade of a dependent of the debtor|
 7).  Any unmatured life insurance contract of the debtor
 8).  $ 11,525 in cash value in any life insurance policy of the debtor
 9).  Any professionally-prescribed health aids for the debtor or dependent of the debtor
 10).  Debtor's right to receive: social security, unemployment compensation, or welfare benefits; veterans' benefits; disability, illness or unemployment benefits; alimony, maintenance and support to the extent reasonably necessary for the support of the debtor and his dependents; and debtor's right to payments under a pensions, profit-sharing, or similar plan
 11).  Debtor's right to receive: an award under a crime victim reparations law; a payment on account of wrongful death of whom the debtor was a dependent, to the extent needed for support; payment under a life insurance policy on the life of a person of whom the debtor was a dependent, to the extent necessary for support; a payment not to exceed $ 21,625 on account of personal injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or a person of whom the debtor is a dependent; and a payment in compensation of loss of future earnings of the debtor or a person of whom debtor is a dependent, to the extent needed for support
 12).  Retirement funds to the extent that they are exempt from federal taxation


When Exemption Laws of the State Apply?

     Generally, the exemption laws of the state where the bankruptcy petition is filed will apply. There is one exception: if the debtor lived in that state for less than 730 days prior to the filing, then the laws of the state where the debtor resided in the 180-day period before the 730-day period will apply. If the debtor ends up not meeting the residency requirements for any state, then he can take the federal exemptions under Section 522(d). This can be a very important consideration in cases where the debtor has moved in the years leading up to the bankruptcy case. A debtor should consult experienced local bankruptcy counsel to advise him in this area.

Written by Henry Rendler

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