How do they determine if a property is exempt in Chapter 7?

For all persons eligible to file under Chapter 7 bankruptcy laws, a debtor is entitled to claim some form of exemptions when filing Chapter 7. However, determining what exemptions lists are applicable, and in certain cases, which exemptions list is most beneficial, will require insight from a bankruptcy attorney with knowledge of the case-specific elements of your case.

In general, the following requirements are applicable to determining property exempt Chapter 7:

• First, a debtor must determine his or her state of residency, specifically residency requirement used for filing bankruptcy in a given state. Each case will present unique elements and residency dates that can influence the jurisdiction where a debtor must file for bankruptcy, and further complicating the issue is that certain state requirements to claim residency can vary greatly.

• Second, once residency is established and a debtor definitively determines the jurisdiction where he or she must file for Chapter 7, the debtor must determine what exemptions lists are applicable to that given state. Again, here is where complications can arise. Certain states allow a debtor to choose between a state exemptions list and a federal exemptions. Other states will allow a debtor to choose solely from the state exemptions list, while refusing access to the federal supplemental exemptions list. In addition, in other states, such as California, a debtor can choose from one of two sets of state exemptions lists.

• Finally, once a debtor has determined his eligibility under certain exemptions lists, he or she must determine which exemptions list best provides protection from liquidation for his or her own personal property.