Everybody who plans to file for a bankruptcy would like to keep as much of their assets as possible. If you are in such a situation, then you can maximize your exemptions by:
Choosing Between Federal and State Exemptions
There are state and federal regulations governing bankruptcy exemptions. Some states allow you to choose between which regulations you wish to file your bankruptcy under. If that is the case in your state, then you should scrutinize the rules and opt for one that favors your situation. Of course, you will need the input of an experienced bankruptcy lawyer to help you with the decision.
Timing Your Bankruptcy Well
If you have recently moved from one state to another, then you should find out how long you need to live in the new state before you are required to adhere to its bankruptcy laws. This is important because some states only allow you to use their exemptions after you have become their permanent resident.
In such a case, you should compare your former state's laws to your new state's laws. If the former state's exemptions are favorable, then you should move first and make your application before you are domiciled in the new state. Otherwise, you can dilly-dally until you are a permanent resident of the new state before filing your application.
Reorganizing Your Assets
If you have not used all your exemptions, then you can convert some of your nonexempt properties into properties you can exempt. One way of doing this is to sell the nonexempt assets and buy some exempt ones. For example, you can sell your second car (which you may have to give up if you file for bankruptcy) and use it to furnish your house. This is possible because you don't have to give up your household items or furnishings (up to a certain level) when you file for bankruptcy.
Note that you also need the input of a lawyer here because you need to keep your reorganization within a reasonable range. In particular, you should not:
- Try to hide the reorganizations (for example, by registering assets under your relatives' names).
- Carry out extensive reorganization.
- Convert excessively valuable assets
Since different jurisdictions have different rules on regulation, a local attorney is best placed to help you with the process. A local attorney also understands the courts and case precedents in the area.
As you can see, navigating bankruptcy exemptions is an arduous task. The better you plan for it, the better your chances will be of maximizing your exemptions. It doesn't hurt to get an experienced bankruptcy lawyer like Anthony Inserra Attorney at Law either.
