Although bankruptcy is covered by federal legislation, there are local laws in each state that also need to be addressed. One of these covers what can and cannot be included in the exempt assets component of a bankruptcy petition. There are 16 states that allow petitioners (debtors) to select either state of federal law, the remaining states use state-based laws only.

Some states, like California, have two pieces of legislation, one setting out the states set of exemptions, the second somewhat mirroring the original federal legislation. In California, you can choose between either one. Some of the state-based laws can be quite generous when compared to federal laws; however, this is not true in every situation.

Because of the complexity of the law and the variations between state and federal laws, it really makes sense to engage a bankruptcy lawyer to help you. They have the knowledge and know both the state and federal components of the law. They often have precedent in their favor as well, having lodged previous petitions before the courts. They have first hand knowledge of how the court in your jurisdiction will handle your petition.

This ‘inside’ knowledge is invaluable when it comes to dealing with exemptions, particularly if you are looking at your home or perhaps a ‘cram down‘ on your car, an issue we addressed in a previous post.

Bankruptcy is a serious issue so if you want to keep your home (or your car) then consult a bankruptcy lawyer first. They will be able to advise whether or not you can keep your home and what you need to do to protect any other assets. They will also give you a fair idea of what assets may be at risk, particularly in a Chapter 7 petition for bankruptcy.

Related posts:

  1. Understanding State Based Bankruptcy Homestead Exemptions
  2. Why You Shouldn’t Choose Just Any Lawyer For Bankruptcy
  3. Chapter 7 Bankruptcy Exemptions A Balancing Game Best Left To The Experts
  4. Bankruptcy Exemptions Differ From State To State
  5. Remove Doubt By Engaging A Bankruptcy Lawyer