Up to $10,000 protection under federal exemption

[Spartan]

I learnt something new today, during my consult with a private trustee.

If you can use Federal exemption, and you do not use up the homestead exemption, you can exempt up to $10,000 in any asset, including cash in the bank ( and under the mattress or in the shoe box ), stocks, mutual funds, cars, jewelry, land, etc. That's the wildcard exemption, under federal rules.

For those of us, who try to preserve the funds in bank account, or some other assets, this may be a route to look into, if it applies.

Good luck.

[FilingOnMyOwn]

That sounds great... Only thing is, that if most of us had 10k laying around, we wouldn't be bk in the first place...

[Spartan]

no no.. It applies to ANY ASSET. That's the beauty of a wildcard exemption. It can be used to protect the non-exempted equity in your cars, for example. May be you have a piece of land your uncle gave you? Jewerly in excess of the allowed exemption?.. a motorbike?... a boat? .. tax refund? Stocks/mutual funds inherited from your grandparents? ... casino winning? Any asset.

[lrprn]

The one hitch in this is that only 15 states allow you to choose federal or state exemptions - Arkansas, Connecticut, Hawaii, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, Washington, and Wisconsin.

If you don't live in one of these states, the filer must use their own state exemptions. Some states don't have wild card exemptions, and most of the ones that do are not nearly as generous as the federal's $10K.

[avega]

Florida also offers a choice of using state or federal exemptions...but I cant find anywhere anything about being able to protect $10K in assets.. Only 5K, are you counting double because of filing jointly??

I just received a settlement for injuries caused in an accident, and got about $15K. After attorneys fees, paying remaining medical debt etc, I recieved just under $7K. after taking care of obligations I am left with about $3500. I also just finished my returns, and will be getting about $4k. SO, thats $7500 cash in hand that I am worried about losing it.. I am filing by myself, so $10K in protection would make my day, but I cant find this anywhere...what section law do I need to look at?? also, are they going to ask me where this money is? Do I need to show receipts?? Thanks!!

[Spartan]

http://www.bankruptcyaction.com/fedexemptions.htm

"...unused portion of homestead to $9,250 may be applied to any property.." that + "..Wild Card • $925 of any property.."

I don't believe the trustee wants you to prove/show where you get the money. That would be something the IRS might be interested in. (I don't mean to imply there is tax obligation on your part. Such compensation is non-taxable.)


Note: It is the "unused portion of homestead".

[so_far_in_debt]

Thanks Spartan, I am in Michigan so I can use the 10K exemption. My first appointment is tomorrow and I am so nervous

[Spartan]

Good luck. Not to worry. I was nervous too. I came out feeling pretty good about my situation. That is until I think of the attorney fees..

If you don't use up the homestead, yeah, the wildcard is there for your benefits. For once, the system works for us poor souls...

[avega]

Oh wait, does Florida allow you to use the federal exemptions or was that under the old laws?? crap.. Do I need to bring KY to the courthouse? Im using the Sacrates BK packet to file.

[Spartan]

Sorry to tell you .. but FL is state only. The state exemption is only generous toward homestead and annuities..(OJ lucked out)...