Asset Protection and Exemptions

In consumer bankruptcy under Chapter 7 or Chapter 13 of the Bankruptcy Code, the debtor can designate certain property as being exempt from the claims of creditors. Because federal bankruptcy policy has always favored the idea of the debtor's "fresh start" - that is, a chance to make a new economic life without the pressure of continuing to payoff creditors for old debts, keeping the debtor adequately housed and clothed is an essential aspect of bankruptcy relief in the broader sense. To see how consumer bankruptcy exemptions can work for you in a California bankruptcy case, contact the Law Office of Rick D. Banks for a free consultation.

In very few consumer bankruptcy cases will a debtor actually have to liquidate or turn over property to a bankruptcy trustee to meet the claims of unsecured creditors. In most cases, almost all of a California debtor's assets will be protected under federal or state exemptions.

Fairly generous exemptions for equity in a homestead are available to California debtors. The value of the California homestead exemption for any particular debtor ranges from $50,000 to $150,000, depending on the marital status, income, age, or health condition of the debtor. Other assets such as household goods, tools of the debtor's trade, pension or retirement benefits, insurance policies, personal injury or wrongful death claims, and limited equity in a motor vehicle are also covered.

The smaller but more flexible exemptions are available for debtors with little or no equity in a primary residence, or who don't own a home at all, but who might need to stop a automobile repossession or have other personal property of some value that the debtor wants to keep.

Bankruptcy debtors who have lived in California for less than two years should be aware that they're required to use the exemptions available in their previous state of residence. Fresno bankruptcy lawyer Rick D. Banks can help you determine which exemptions you are better off using.

In some, though not very many cases, you won't be able to exempt all of the property you want to keep. We will work with the bankruptcy trustee, creditors, and others to help you keep your property. In a Chapter 13 case, the purchase price of nonexempt assets can be spread out over the three to five-year plan repayment period.

Contact Fresno bankruptcy attorney Rick D. Banks in Fresno, California, for information and advice about bankruptcy, asset protection, and exemptions specific to your own circumstances.