Splitting up the wildcard exemption

[daylate]

Is there an advantage to splitting up a wildcard exemptions among several items leaving each one with a non-exempt "stub" of say $300-$500 or is it better to fully exempt say 2 of 3 and try to cut a deal to buy back the third item?

My thought is that if you try the split it up theory the trustee may say ok I'll play the game and take all three items and send you the exempt portions or you can pay me the non exempt portions and I'll be on my way.

Any one done this or have thoughts?

Thanks.

[tcreegan]

Hi daylate,

I think this game will be "trustees choice" ...they have the job to "administer the estate" in such a way as to produce the maximum return for the creditors. As long as you get your exemption, how they go about it is their call.

That said, they also are busy people, if your suggestion saves them time and doesn't lower the return for creditors much....

Another factor in your favor is the cost of sale. Moving stuff to a sale site, advertising the sale, paying the auctioneer, etc. This could be 10-25% of the value, maybe more. This means you can tender an offer to the trustee for 10-25% less than the value, since it saves them time and the $$ outcome is the same, they'd be foolish not to take it.

Good luck with it, hope you have a "The Price is Right" trustee willing to deal....

Tom in Colo

[willdufauve]

Great question. I've been thinking this one out so much my brain hurts.

[BobMango]

Not sure how that would be viewed. You get to pick your exemptions but every thing I've seen generally shows the exemption at the full value of the asset. I'm thinking if the trustee feels you are playing games they will reward you with some extra scrutiny.

When we filed we did not have enough exemptions to cover everything so we covered all of the easy to liquidate items like cars and bank accounts, tax returns, etc. This left about $15,000 worth of cattle with only $9,000 exempted. We were betting that the trustee didn't want to pick up our herd, pay us the exemption amount we did have on them, and then have to house and feed them until he could sell them. It paid off for us, the trustee abandoned them and we sold them shortly after discharge.