by Gini Nelson

What are "Exemptions", Again?

My client asked me this last week as we were going through her final papers for her Chapter 7bankruptcy filing. I told her the easy way I think of them: property that isexempt from being liquidated by the case trustee.  In my state of New Mexico, you generally can choose between using the state exemptions and the federal exemptions.  (But only one choice — it's use the state for all that you have or use the federal for all). Both are found in statutes and both state what property is protected against being taken from you by legal process.

For most things you are trying to keep the New Mexico and the federal exemptions do not vary in significant ways.  New Mexico's protects a little more equity in your car ($4,000.00) than the federal's ($3,450.00).  But they vary in big ways for some property — New Mexico protects $60,000.00 worth of equity in your home while the federal exemptions only protect $21,625.00.

So if you are thinking about bankruptcy, ask your lawyer about exemptions — what options do you have, what property will you be able to keep?  She will also ask you about whether there are any liens on your otherwise exempt property because that can complicate matters (and not necessarily in a bad way! Read Maryland bankruptcy attorney Brett Weiss' post on When  a Tax Lien Can  Be a Good Thing…).

for more information on bankruptcy matters please call our office for an appointment at 305-548-5020

Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog

"Turn to us when you need help"