Exempt Personal Property in Indiana and Washington Bankruptcies


By submitting a list or schedule of your exempt property in your bankruptcy proceedings you can protect certain elements of your personal property. That way you can keep it from the hands of creditors seeking to redeem it for value. The fear of bankruptcy, a fear that most financially responsible people experience, shouldn't be a crippling factor in financial decisions anymore. We can all survive filing bankruptcy and with a little luck and the right bankruptcy lawyers, nobody will have to give up everything.

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When filing for bankruptcy in order to obtain financial relief in the form of a fresh start that will eliminate debt, one must provide a list of personal effects and property. This is generally passed on to creditors who can use such information to repossess or lien debtor properties. Since bankruptcy is supposed to help debtors out in the long run, states provide lists of what types of personal property and equity is exempt from collection or transfer of ownership. Ideally, these laws maintain a bankruptcy system that guarantees creditors won't take things of little or no economic value and cause debtors undue hardships or suffering. Certain property equity, which is the difference between it's market value and that of any claims held against it, may be qualified to remain out of the clutches of creditors.

Different states have varying standards. In Washington state bankruptcy exemptions can protect up to $40,000, $2,700, and $5,000 of the equity of a homestead, household goods, or a vehicle. Life insurance and retirement plan bankruptcy exemptions can guard these types of monthly payments from creditors, or protect existing life insurance plans that apply to a debtor or their next-of-kin. Exemptions also apply to savings, bonds, pensions or anything in a qualified retirement plan.

In addition to these and a number of other broad categories, Washington state has a wildcard bankruptcy exemption that will protect up to $2,000 equity in various property not covered by other exemptions. The state of Indiana's laws protect primary residence equity up to a value of $7,500 and $15,000 if a spouse shares the owner title for the property with the debtor. Similarly, $4,000 equity in other real estate besides primary residences can be guarded from creditors and up to $8,000 is safe if a spouse co-owns the real estate. Intangible property, such as money in bank accounts, as well as from tax refunds and other sources, can only be guarded in amounts up to $100, but as with many other states, retirement plan payments are 100% safe.

Different bankruptcy exemptions exist in different states. Seemingly similar exemptions may not have the same amount of value from one locale to another. This can be very confusing to a debtor. However, every qualified bankruptcy attorney makes it their business to know exactly what property they can save for you, depending on the rules of the state in which you reside.


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