Learn How Federal Bankruptcy Exemptions Can Protect Your Assets and Give You A Fresh Start
Are you struggling with debt and considering bankruptcy? If so, it’s important to understand the federal bankruptcy exemptions that are available to you in Milwaukee, Wisconsin. These exemptions can help you protect your assets and get a fresh start.
At Miller & Miller Law, LLC, we have extensive experience helping people in Milwaukee file for bankruptcy. We can help you understand the different types of bankruptcy and choose the one that is right for you. We will also work with you to claim the maximum amount of exemptions allowed under the law.
If you are considering bankruptcy, we encourage you to contact Miller & Miller Law, LLC for a free case evaluation. Our Milwaukee law firm can help you understand your options and make the best decision for your financial future.
Short Summary
- What is Bankruptcy?: Bankruptcy is a legal proceeding that helps individuals and businesses obtain relief from their debts and provides a fresh start.
- Types of Bankruptcy: There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13. Chapter 7 allows individuals to eliminate unsecured debts, but they must surrender non-exempt assets. Chapter 13 allows individuals to keep their assets by creating a payment plan to repay debts.
- Federal Bankruptcy Exemptions: Federal bankruptcy exemptions protect certain assets from being liquidated in bankruptcy proceedings. These exemptions vary depending on the state of residence.
- Available Federal Bankruptcy Exemptions: Federal exemptions include homestead exemption ($27,900), motor vehicle exemption ($4,450), personal property exemption ($14,875), tools of the trade exemption ($2,800), and wildcard exemption ($1,475).
- Which Exemptions are Better, Federal or State?: The best set of exemptions depends on individual circumstances. Federal exemptions are more widely available and predictable, while state exemptions may be more generous for homestead, motor vehicles, and wildcard assets.
Contact Miller & Miller Law, LLC today to schedule your free case evaluation. We can help you get the fresh start you deserve.
What is Bankruptcy?
Bankruptcy is a legal proceeding that allows individuals or businesses to obtain relief from their debts. It provides a fresh start for those who are struggling to make ends meet and can help them avoid creditor harassment, wage garnishment, and foreclosure.
What are The Types of Bankruptcy?
There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13.
- Chapter 7 bankruptcy is known as liquidation bankruptcy. It allows individuals to eliminate most of their unsecured debts, such as credit card bills, medical bills, and personal loans. However, Chapter 7 also requires individuals to surrender most of their non-exempt assets, such as real estate, vehicles, and investments.
- Chapter 13 bankruptcy is known as reorganization bankruptcy. It allows individuals to keep their assets by creating a payment plan to repay their debts over a period of 3 to 5 years. This option is typically used by individuals who have a steady income and want to keep their property.
What are Federal Bankruptcy Exemptions?
Federal bankruptcy exemptions are provisions in the United States Bankruptcy Code that allow debtors to protect certain assets from being liquidated in bankruptcy proceedings. These exemptions are designed to help debtors maintain a basic standard of living and to allow them to make a fresh start after filing for bankruptcy.
The specific exemptions that are available to debtors vary depending on their state of residence. However, some general federal exemptions apply to all debtors in the United States.
Are Federal Bankruptcy Exemptions Available in Wisconsin?
Yes, federal bankruptcy exemptions are available in Wisconsin. Debtors in Wisconsin can choose between the federal exemptions and the Wisconsin state exemptions. However, debtors cannot cherry-pick exemptions from both sets of laws. They must choose one set of exemptions to apply to all of their assets.
What Are the Federal Bankruptcy Exemptions Available?
If you and your spouse are filing for bankruptcy jointly, it’s important to note that you have the option to double the exemption amounts. These specified amounts are applicable for cases filed between April 1, 2022, and April 1, 2025.
Federal Bankruptcy Homestead Exemption: Shielding Your Residence
Under federal exemptions, you can protect up to $27,900 of equity in your primary residence (11 USC § 522(d)(1)). Residing in the property is a requirement to utilize the homestead exemption. Residential properties such as houses, condominiums, or personal property used as a residence are eligible for the homestead exemption, excluding equity in investment or rental properties.
Federal Bankruptcy Exemptions: Safeguarding Your Possessions
Various federal exemptions apply to personal property, excluding real estate:
- $4,450 for your motor vehicle (11 USC § 522(d)(2)).
- $1,875 allocated for jewelry (§ 522(d)(4)).
- $700 per individual item, with a combined value of $14,875, applicable to household goods, furnishings, appliances, clothing, books, animals, crops, and musical instruments (11 USC § 522(d)(3)).
- $2,800 designated for tools of the trade, including implements and books, as well as health aids (11 USC § 522(d)(6)).
- $14,875 covering loan value, accrued dividends, or a life insurance policy interest (11 USC § 522(d)(8)).
Federal Bankruptcy Exemptions: Protection for Domestic Support and Public Benefits
Exemptions also cover spousal or child support necessary for sustenance, required life insurance payments, and all Social Security benefits, unemployment benefits, veteran’s benefits, public assistance, and disability or illness benefits.
Exemption for Personal Injury Recoveries
For personal injury claims, an exemption of $27,900 is applicable, excluding pain and suffering or monetary loss (11 USC § 522(d)(11)(D)). This includes awards for the loss of future earnings essential for support, recovery for the wrongful death of a person relied upon for support, and compensation received as a crime victim.
Federal Bankruptcy Exemptions: Safeguarding Retirement Accounts
Tax-exempt retirement accounts receive complete protection in bankruptcy, with the federal bankruptcy exemption limit for IRAs and Roth IRAs capped at $1,512,350.
“Wildcard” Federal Bankruptcy Exemption
The federal wildcard exemption, currently set at $1,475 plus $13,950 of any unused portion of your homestead exemption, provides flexibility to safeguard any property you choose (11 USC § 522(d)(5)).
Weighing Your Options: Federal Bankruptcy Exemptions vs. Wisconsin Exemptions Exemptions
The federal bankruptcy exemptions and Wisconsin state exemptions each have their advantages and disadvantages. Which set of exemptions is better for you will depend on your individual circumstances.
Advantages of the federal bankruptcy exemptions:
- More widely available: The federal bankruptcy exemptions are available to all debtors in the United States, regardless of their state of residence.
- More generous for tools of the trade: The federal tools of the trade exemption is up to $2,000, while the Wisconsin tools of the trade exemption is not available.
- More predictable: The federal bankruptcy exemptions are more predictable than the Wisconsin state exemptions, which can vary depending on the specific facts of your case.
Advantages of the Wisconsin state exemptions:
- More generous for homestead and motor vehicles: The Wisconsin homestead exemption is $75,000 for an individual and $150,000 for a married couple filing jointly, while the federal homestead exemption is $27,500. The Wisconsin motor vehicle exemption is $4,000 for an individual and $8,000 for a married couple filing jointly, while the federal motor vehicle exemption is $4,800.
- More generous for wildcard: The Wisconsin wildcard exemption is $12,000 for an individual and $24,000 for a married couple filing jointly, while the federal wildcard exemption is $1,300.
Ultimately, the best way to determine which set of exemptions is right for you is to consult with an experienced bankruptcy attorney. An attorney can help you understand the pros and cons of each set of exemptions and make an informed decision.
Call Our Milwaukee Bankruptcy Attorneys Now!
If you are considering filing for bankruptcy in Milwaukee, Wisconsin, understanding what are federal bankruptcy exemptions is crucial to protect your assets and achieve a fresh start. These exemptions safeguard a variety of assets, including your home, vehicle, and personal belongings, ensuring that you retain essential property even as you navigate the bankruptcy process.
Miller & Miller Law, LLC, a team of experienced bankruptcy attorneys, is here to guide you through the intricacies of federal bankruptcy exemptions in Milwaukee, Wisconsin. Don’t let debt weigh you down. Contact Miller & Miller Law, LLC, today to schedule your free case evaluation and explore your options for financial relief through bankruptcy.
Together, we can help you navigate the complexities of bankruptcy laws and safeguard your assets, ensuring a brighter financial future.
