A bit of good news just came in for anyone out there considering filing a bankruptcy case:
As of April 1, 2013, the total amount of property that a debtor can “keep” after filing Chapter 7 bankruptcy increased to $12,725.00, an extra $750 over prior law.
The increase is part of an every-three years tweaking of the bankruptcy code to account for inflation.
A couple of important points about this figure: it represents the amount available under the federal “wild card” exemption, applicable to any property a debtor owns that is not covered by any other exemption. Even more good news: The federal wild card is allowed to be taken by debtors who live in either Massachusetts or New Hampshire, as well as a few other states.
The full amount may not be available, however, to debtors who have a lot of home equity built up, so it’s best to check with a bankruptcy attorney before making rash assumptions.
Like I said, the wild card can protect any type of property. In actual practice, wild card exemptions are most often applied to bank accounts and cash that otherwise would be lost upon filing. So is it possible to go bankrupt and keep over $12K in the bank? For a lot of people, you bet it is!
By Doug Beaton