What is a bankruptcy exemption and how are they different in different states? 22 Answers as of July 05, 2011

I am confused because I recently moved after I got married and I though that bankruptcy law is a federal law that is the same everywhere but I see different answers for what an exemption is based on the state.

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Breckenridge and Walton
Breckenridge and Walton | Alan D. Walton
Each state can opt in or out of the federal exemptions. You need to know what your state's position is, and what the rules are for exemptions. Michigan allows the use of either the federal or state exemptions, whichever is best for you - it is usually the federal exemptions.
Answer Applies to: Michigan
Replied: 7/5/2011
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
In California there are two sets of exemptions available in a bankruptcy. Both are found in the California Code of Civil Procedure. Section 704 etc protects home equity as well as miscellaneous assets. Section 703 protects about$23,000 of miscellaneous asset, including home equity. Some states have protection under section 522 of the bankruptcy which is similar to CCP section 703. Section 522 is not available in California because California is an "opt out" state that uses only its own exemptions in a bankruptcy.
Answer Applies to: California
Replied: 6/30/2011
Bird & VanDyke, Inc.
Bird & VanDyke, Inc. | David VanDyke
Each state has different federal bankruptcy court districts. The state you live in will determine what exemptions are available to you. You must live in the state for at least 2 years continuously to claim that state's exemptions. If you have not lived in the state where you currently reside for at least 2 years you must claim the exemptions from the prior state you lived in. However, to claim the prior states exemption you must have resided there for at least 2 years.
Answer Applies to: California
Replied: 6/30/2011
Law Office of Maureen O' Malley
Law Office of Maureen O' Malley | Maureen O'Malley
Exemptions are the items, and their amounts, that you're allowed to keep without having the Trustee sell them to pay creditors. There is a Federal Exemption Statute, and that allows states to opt out and determine their own limitations or to combine their own with the Federal. The exemption you are allowed depends on where your property has been for the past 2 years, so it may still be the state where you lived before you married. You'll certainly want to consult with an attorney on this.
Answer Applies to: Virginia
Replied: 6/30/2011
Financial Relief Law Center
Financial Relief Law Center | Mark Alonso
Even though it is Federal, each District within each State has slightly different rules based on specifics to that area.
Answer Applies to: California
Replied: 6/30/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    Bankruptcy exemptions are controlled by the federal bankruptcy code but the code itself has allowed states to either "opt-out" of the federal exemptions and use their own, allow people to use both or limit people to use of the federal exemptions. The exemptions available to you are not dictated on where you file, but instead, where you lived for the 730 days prior to the bankruptcy filing. So, for example, if you just moved to Illinois from Indiana, but you hadn't been in Illinois for two years before filing, you would have to use the exemptions provided by Indiana law. Add another twist, where, Indiana, like many states, limits use of its exemptions to residents, and you would have to use the federal exemptions. As you can see from this "simple" example, it is a complex process and you would be well advised to seek counsel from a bankruptcy attorney to determine what exemptions are available to you.
    Answer Applies to: Indiana
    Replied: 6/30/2011
    Mercado & Hartung, PLLC
    Mercado & Hartung, PLLC | Christopher J. Mercado
    Exemptions allow a debtor to keep his exempt property. Some states allow you to choose between the federal and state exemptions. The exemption laws vary greatly from state to state.
    Answer Applies to: Washington
    Replied: 6/30/2011
    Law Offices of Alexzander C. J. Adams, P.C.
    Law Offices of Alexzander C. J. Adams, P.C. | Alexzander Adams
    Exemptions are generally state law. Depending on your state there may be two sets of exemptions (like California). There is also a federal set of exemptions. These are sometimes the default exemptions, and in certain states, you can pick either the state or federal exemptions (i.e., whichever give greater protection).
    Answer Applies to: Oregon
    Replied: 6/29/2011
    Law Office of Asaph Abrams
    Law Office of Asaph Abrams | Asaph Abrams
    Exemptions from enforcement of judgment are what help determine what assets are shielded from liquidation in chapter 7. There's a rather convoluted means of deciding exemptions when you've moved about the country. See http://www.bankonitsd.com/Bankruptcy_FAQ_general_residency.html
    Answer Applies to: California
    Replied: 6/29/2011
    Benson Law Firm
    Benson Law Firm | David Benson
    Each state has its own exemptions and decides whether to opt in or out of the federal exemptions. If you have not yet retained competent bankruptcy counsel, you should do so now.
    Answer Applies to: Ohio
    Replied: 6/29/2011
    Law Office of Dennis Jay Sargent Jr, PLLC
    Law Office of Dennis Jay Sargent Jr, PLLC | Dennis J Sargent Jr.
    Bankruptcy law is the same throughout the country because it is based upon on Federal Statutes. However, that being said there are local rules that supplement the Federal Law to take into account the differences in the local jurisdictions. In addition, the Bankruptcy Code provided for the individual states to opt out of the exemptions that were provided for in the Bankruptcy Code. Again, this is to allow for different circumstances in different parts of the country. Things like cost of living, housing expenses and demographics make it difficult to have on set of exemptions that would be fair to all. Some states opt out totally and some states allow the consumer to choose either the federal or state exemptions. You will have to consult a local attorney to see which exemptions you would be permitted to use.
    Answer Applies to: North Carolina
    Replied: 6/29/2011
    Law Office of J. Scott Logan, LLC
    Law Office of J. Scott Logan, LLC | John Scott Logan
    Each state has its own laws governing exempt property. Some states use the Federal exemptions; others allow you to choose state or Federal exemptions. If you have not lived in a state more than 2 years, you must use the exemptions applicable to your state 2.5 years ago. This is not legal advice. You should consult a lawyer licensed to practice in your state.
    Answer Applies to: Maine
    Replied: 6/29/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    An exemption is the amount that by law you are allowed to exempt and not turnover to your creditors ( in really simple words). For example, if your state follows the federal exemptions, you get so much for equity in your home, so much for personal household goods, etc. The reason they may differ from state to state, is that state's usually have their own exemptions, that generally are different from the federal ones. Generally you have to take either the state or federal exemptions, you can't mix and match. The fact that you recently moved may, once again depending on where you moved to or from, require to take federal exemptions, or the exemptions from the state you moved from. This is a really complicated issue and you should see an experienced bankruptcy attorney to help you with!
    Answer Applies to: Michigan
    Replied: 6/29/2011
    Burnham & Associates
    Burnham & Associates | Stephanie K. Burnham
    There are Federal exemptions which are universal for everyone and there are State exemptions which vary from state to state. The Debtor can choose to use either the Federal exemptions or the State exemptions but not both. Whether or not the Debtor chooses Federal or State depends on the particular facts of their situation, and what will make the most sense based on their assets.
    Answer Applies to: New Hampshire
    Replied: 6/29/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Bankruptcy law is federal, but the federal bankruptcy law uses the exemptions of the state where that particular bankruptcy court is located.
    Answer Applies to: California
    Replied: 6/29/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    It is even more complicated than that. If you have moved, bankruptcy law may require you to use exemptions from your prior state rather than your current state. This is why people hire experienced attorneys to help them. If you don't know the rules you may lose property you could otherwise protect.
    Answer Applies to: Colorado
    Replied: 6/29/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Each state offers different protections for your property (exemptions). You must properly exempt your property or the BK court will liquidate it. CA offers very generous protections.
    Answer Applies to: California
    Replied: 6/29/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Bankruptcy operates on top of some state laws. States can decide which property is exempt. They can pick their own or use the federal exemptions. Some states, like California, allows debtors to pick a set of exemptions unique to California or use a set that mirrors the federal exemptions.
    Answer Applies to: California
    Replied: 6/29/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    Exemptions are allowed protections for assets that prevent creditors from taking them, either inside or outside of a bankruptcy case. In bankruptcy, exemption laws are based on the state where you resided for the 2 years prior to filing your bankruptcy case or, if you lived in more than 1 state during that period, in the state where you resided for the greater part of the 180 days prior to that 2 year period.
    Answer Applies to: California
    Replied: 6/29/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Everyone who files needs a lawyer. Let me stress that. In cases where you move from one state to another, you need a very good lawyer. Each state has its own exemptions and that is part of the federal statute. What complicates this is that depending on several things you may have to use the exemptions from your former state rather than the current one (and sometimes may have to use federal ones instead). This is a complex analysis that depends on how long you lived in each state. The issue may even affect which state you file in.
    Answer Applies to: Georgia
    Replied: 6/29/2011
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