Filing for Chapter 7 bankruptcy can be a distressing process. While losing one’s home, huge tax bills or pestering debt collectors are more crucial concerns, the prospect of losing one’s wedding ring, heirloom jewelry or just a necklace, a pair of earrings or a special wristwatch can be an additional stress.
When you file for Chapter 7 bankruptcy, you are expected to surrender certain assets (not all), which are then sold by the trustee, to repay your creditors with the proceeds. The items that you have to surrender depend on the state in which you live. Each state, including the District of Columbia, has laws, called Exemptions. These laws are passed with the idea, that a person gone bankrupt, should not be deprived of basic necessities for living – clothing, shelter, car, furniture, etc. Under these laws, some items of property are exempted regardless of their value, while others are exempted only up to a certain dollar amount. The freedom to choose between state exemptions or federal bankruptcy exemptions depends on the state in which you live. You can know more about state and federal exemptions by visiting Recovery Law Group or calling 888-297-6203.
Common Exemptions to Protect Your Jewellery
Let’s discuss some common exemptions that can help you to save your jewelry. The availability of these exemptions varies from state to state.
- Exemption of Wedding or Anniversary Ring – While some states don’t ask their debtors to give up the wedding or anniversary ring, regardless of its value, others allow it to be retained only up to a certain dollar amount. Some states don’t have this exemption at all.
- Exemption of Jewellery – Many states allow this exemption only up to a certain dollar amount. Others can be quite liberal.
- Exemption of Heirloom – Some states have this exemption to let you safeguard your ancestral jewelry that has been passed down in your family for generations. Whether you can keep the jewelry of unlimited value, or only of a certain dollar amount, depends on your state.
- Exemption of Wearing Apparel – There is a specific mention about keeping the wearing apparels, often to an unlimited value, in many state bankruptcy courts. Some states also allow the debtors to keep cufflinks, mid-priced watch, and other small jewelry items, under this exemption.
- Wildcard Exemption – This exemption lets you apply a certain dollar amount (as low as $200 to as high as $25,000) to any kind of property. So, in case your state has this exemption, you can use some or the complete value to protect your jewelry.