The decision to file for bankruptcy is one that often comes at a time when a person is under great financial stress. If you’re in this position, you may want to learn as much as you can as quickly as possible about bankruptcy.
One thing that you may come across is the presence of exempt and nonexempt property. Understanding how these concepts affect your property may help you to make a decision about whether to file for bankruptcy or not.
Exemptions are set by state law
While some bankruptcy filers have the option between state exemptions and federal ones, that’s not the case in West Virginia. If you file here, you will have to use the state’s exemptions, which are found in West Virginia Code §38-10-4.
Bankruptcy trustees have the option of seizing nonexempt property and liquidating it to pay debts in the bankruptcy case. They may opt not to do this if the value of the assets isn’t worth the time and expense of liquidating them.
Common exemptions in West Virginia
Exemptions are set into distinct categories that have specific limits for each. Some of the more common include:
- Up to $35,000 in home equity of your primary residence, which doubles if you file jointly with your spouse and co-own the property
- Up to $7,500 of equity in one vehicle
- Up to $16,000 in personal property, with a limit of $800 per item
- Up to $800 for a wildcard exemption, with the option of using unclaimed homestead exemption as an additional wildcard exemption
- Up to $3,000 exemption for tools of the trade for individuals who need certain equipment or tools for their job
Other exemptions include those for certain life insurance policies, health aids, and public benefits. Retirement plans may also qualify for an exemption.
It’s critical to evaluate how these exemptions may affect your life. Working with someone familiar with bankruptcy filing may be beneficial as you go through the process.
