Bankruptcy Exemptions
Whenever a person decides to file for bankruptcy protection, whether in Chapter 7, debt elimination or Chapter 13, debt reorganization, they will be required to list out all of their debts, assets and income sources to properly establish their qualifications. In the State of Delaware, the court will allow a certain amount of your assets to be exempt from being liquidated, as under Chapter 7, to repay your creditors. Such items as your home, your car, your personal possessions and tools you use for work are exempted. The basic things you need to live and work will ordinarily be protected. Any other assets that are not covered or are not deemed essential, such as boats, recreational vehicles, or items that value exceeds the limits set, will be ordered to be sold to repay some of your debts. To find out what the exemptions are that you are entitled to you should speak to Peter Schaeffer at Avenue Law. We can explain the available exemptions and how they apply to your bankruptcy program.
The total financial limit of available exemptions in Delaware is $25,000 for an individual or $50,000 for a married couple. These figures do not include exemptions for your principal residence or any retirement plans. If you do own or have equity in your home, you will be allowed up to a $125,000 exemption.
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Other types of exemptions include such items as:
- Personal property such as clothing, books, and jewelry
- 85% of your earned but unpaid wages
- Tax exempt retirement accounts and IRA accounts
- Worker's comp or unemployment benefits
- Vehicles and tools of the trade need in your work
- Various life insurance policies, health care policies or disability payments
To get a full picture of the exemptions you will qualify for you need to review your entire financial situation with your bankruptcy attorney. We can answer any questions you have and can help you prepare the documents you need for your bankruptcy.
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