An example of exemptions at work — jewelry

Following up on the idea that most people don’t lose their property when they file for bankruptcy, lets take a quick look at a situation that occurs over and over again in consumer bankruptcies — debtors who own jewelry.

That would, of course, cover just about everyone, as it is rare to find a person  who doesn’t have at least one trinket of some type. At my office I like to have debtors catalog their jewelry for me right at the start of the process.

There’s a couple of reasons for this. Although most jewelry is valuable, at least to a modest degree, it can be easily overlooked by debtors worried about putting values on a house or a car. Most people who wear jewelry have some pieces that they wear almost everyday, meaning they will have it on at the meeting with the trustee in their case. So it would be sort of nice that they declared it properly on their case forms — makes the hearing go much smoother!

Although debtors are often worried about losing items of sentimental value during a bankruptcy case. The federal bankruptcy code currently provides an exemption of $1350.00 specifically for jewelry; the exemption doubles to $2,700 for married couples filing jointly. If the value is greater than that, your attorney can often use “wild card” exemptions to protect the excess amount.

Debtor’s filing bankruptcy in New Hampshire and  using the NH state law exemptions receive a $500 jewelry allowance, plus there is wild card money available under the New Hampshire bankruptcy exemption schedule as well.

Consumers who have truly valuable jewelry collections that exceed these exemption limits by a large amount may be able to propose a Chapter 13 plan and keep their jewels anyway. So there really should be no worry about losing sentimental jewelry in a typical consumer bankruptcy case.


By Doug Beaton

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