New exemption for firearms in the works

By the time hunting season rolls around this fall, the federal bankruptcy code may have a specific exemption allowing debtors to keep firearms when they file a bankruptcy case.

The House of Representatives has passed a bill that will create a new exemption covering “the debtor’s aggregate interest, not to exceed $3,000 in value, in a single rifle, shotgun, or pistol, or any combination thereof.” The measure still needs the approval of the Senate and president to become law.

While this new exemption will be of some interest to sportsmen, by itself it probably won’t have a dramatic impact, as firearms and all other sports equipment are already covered by the generous exemption for household goods of $11, 525.

The most likely scenario where the firearms exemption would come in to play is a debtor who had more than $12,000 in ordinary household goods, and an extensive gun collection as well. In that case, the debtor could keep an extra $3000 of his favorite pieces, despite filing the bankruptcy case.

 

By Doug Beaton

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