One of the biggest concerns people have is whether they will lose their property if they file bankruptcy. It’s important to keep in mind that filing bankruptcy is a fresh start – not a punishment. The majority of people I help file bankruptcy get to keep everything they want.
What is an exemption?
An exemption protects property from your creditors. By using exemptions, a debtor can keep a significant amount of assets safe in bankruptcy. Exemptions play an important role in both Chapter 7 and Chapter 13 Bankruptcy.
There are both state and federal exemptions and not all state exemptions are alike. A debtor should consult with a bankruptcy lawyer when determining whether to use a state or federal exemption. The short answer is exempt property is what you can keep when you file.
In Kansas, the common types of exempt property include:
Equity in your homestead KSA 60-2301. Necessary items like clothing, furniture, household goods, appliances KSA 60-2304(a) One vehicle, per Debtor, for regular use up to a specified value KSA 60-2304(c). ERISA qualified retirement accounts, such as IRA, Roth IRA, 401(k), and 403(b). The right to receive pension benefits, such as union pensions, KPERS, and FERS. Workers compensation payments. Jewelry up to $1,000 per Debtor KSA 60-2304(b). Tools and Equipment used in the Debtor’s trade, up to $7,500 KSA 60-2304(e). Term Life Insurance Policies KSA 60-2313(a)(7). The right to receive child and spousal support. Disability benefits. Benefits such as social security, welfare and unemployment – even if held in a bank account as long as not commingled. Earned Income Credit KSA 60-2315
Should I Contact a Bankruptcy Lawyer for Assistance with Exempt Property?
Most of our clients are of modest means, and most of what they own is exempt. That said, bankruptcy is an incredibly complex area of law even for a seasoned bankruptcy attorney. We highly recommend if you are contemplating filing bankruptcy that you speak to an attorney first before you file on your own.
If you have any disputes or legal issues involving your exempt property, you may need to hire a lawyer for advice. A competent bankruptcy attorney will be able to inform you regarding bankruptcy exemptions and represent you if a lawsuit arises over your property.
If you have questions about bankruptcy exemptions or any other issues – give us a call for a FREE Consultation over the phone or in person at 785-379-3600 or email us now.