Are There Furniture Exemptions When You File For Bankruptcy?
Does Filing For Bankruptcy Means I Can Lose All My Belongings?
When you file for bankruptcy, the court will take a close look at your finances to determine if you qualify for bankruptcy and whether you are able to pay anything to your creditors. The court will look at your income, as well as your routine expenses and what you owe your creditors. If you are determined to have enough disposable income to pay your creditors, the court will likely disqualify you from filing for Chapter 7 bankruptcy and put you on a repayment plan under a Chapter 13 bankruptcy filing.
Under the law, creditors also have the right to take legal action to recover what you owe them, including seizing your personal property or goods. When the bankruptcy court assesses your ability to pay your creditors, it will also look at what assets you might have to liquidate to pay even part of what you owe. That has some people worried that they could lose important belongings, such as their home, their vehicle, or even their furniture.
State Exemptions For Furniture & Other Goods
You don’t have to worry: You likely won’t have to tally up and sell everything you own to pay your creditors after you file for bankruptcy. In most cases, you won’t have to lose anything except the debt that has been holding you down for too long.
Bankruptcy law includes many exemptions for your personal property, from the big things like your house to the smaller things like your household goods and clothing. Each state has its own exemptions. In Arizona, you can exempt up to $6,000 worth of household furnishings and goods. If you are a married couple filing bankruptcy jointly, you can exempt up to $12,000. Unless you have high-end furniture, original artwork, or a lot of electronics, you likely will not exceed these exemption limits.
Federal Exemptions For Furniture & Other Goods
Federal law provides some additional bankruptcy exemptions that may be useful for protecting your personal goods. Federal law does not provide a specific exemption for furniture or other goods, but it does provide a wildcard exemption that you can apply to any personal items. If you don’t need to use the wildcard exemption for your home or other items that you deem more important, you can apply it to your furniture and personal belongings.
The federal wildcard exemption is currently $1,325. You can apply all or part of that to your furniture. For example, if you have antique furniture that exceeds the state’s exemption for furniture and personal goods by $1,000, you can use $1,000 of the federal wildcard exemption to cover it and still have $325 to apply to something else.
Typically, states also have their own wildcard exemption that you could apply in this way. However, Arizona does not provide for a wildcard exemption. You will have to work with your bankruptcy attorney to find the best application of the federal wildcard exemption to protect all the things that you want to keep in your bankruptcy filing.
You do not have to lose anything in your bankruptcy filing. Most people are able to exempt their personal property from their bankruptcy discharge, including their homes, their cars, and their personal items. If you own luxury goods, you’ll need to talk with a Mesa bankruptcy attorney about how these will be treated in the bankruptcy and whether they can be protected. If you find out that certain items are not protected, be careful in weighing their value against what you would gain from the bankruptcy. If you are able to get your debt discharged, you will free up the finances to purchase anything you may have lost later.
Hire An Experienced Bankruptcy Lawyer In Phoenix
If you are struggling with debt, call My AZ Lawyers to talk with one of our experienced bankruptcy lawyers about how bankruptcy may provide the debt relief you need. We represent clients in both Chapter 7 bankruptcy and Chapter 13 bankruptcy. We’ll talk with you about your goals and then thoroughly review your finances to determine what bankruptcy strategy would give you the most benefits. We serve clients throughout the Phoenix area. Contact us today to schedule your free consultation with a bankruptcy attorney and learn more.
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