Exemptions are an important of the bankruptcy filing process. When you file for bankruptcy, the appointed bankruptcy trustee may seek to sell non-exempt assets to pay off your creditors. Exemptions provide protection for some of your property and must be properly listed in your bankruptcy filing. Property that is exempt is safe from the Trustee selling it to pay your creditors. Exemptions provide a way for people who file bankruptcy to keep their possessions while they work to fix their financial situation. If you are considering filing for bankruptcy, a Kansas City bankruptcy attorney can educate you as to your options for keeping your property during bankruptcy.
Missouri Bankruptcy Exemptions
Below are some of the important Missouri state exemptions available to people who file for bankruptcy:
- Homestead – This covers up to $15,000 of real property (real estate used as a home by the debtors) or up to $5,000 for a mobile home.
- Personal property –
- An automobile for each debtor of a value of up to $3,000;
- Possessions such as clothing, appliances, books, animals, musical instruments in an amount of up to $3,000;
- Jewelry up to $500, and a wedding ring up to $1,500;
- There is also a “wildcard” category for personal property or cash of up to $1,250 with an additional $350 per child for the head of the family, or up to $600 for the non-head of the household; and,
- Cash is also exempt in an amount of up to $600.
- Pensions – For the most part, pensions are completely safe. Tex exempt retirement accounts like traditional and Roth IRAs are exempt up to $1,095,000 per person.
- Public Benefits – Items like workers’ compensation, unemployment compensation, social security benefits, veterans’ benefits, public assistance, and crime victims’ compensation are all exempt property.
- Tools of the trade – This covers up to $3,000 for items used in the course of your work or business.
- Alimony and child support – These items are exempt up to $750 per month.
- Insurance – Generally, insurance policies and proceeds are exempt property.
In some states, bankruptcy filers can choose between using their state bankruptcy exemptions or federal ones. Most states, however, including Missouri, are “opt-out” states, which have decided to opt out of the federal bankruptcy exemptions. In these opt-out states, only the state exemptions are available. Additionally, if a person has not lived in the state long enough, he or she may not be able to use that state’s exemptions. For more information about taking advantage of bankruptcy exemptions, contact a Kansas City bankruptcy lawyer at The Sader Law Firm.