How do federal exemptions work?

[Spagal]

Sorry I cannot seem to locate a very clear definition of how choosing federal exemptions vs state works. I am in MA.

I have very little assets. My atty made it seem like I would have nothing to lose if I filed.

I own no property and only have 1 old pickup that is paid for and a newer car that is worth less than I owe but necessary for commuting to work.

Atty made everything sound so simple. Maybe it is and I am just reading too much.

Am I right to assume that all my assets up to $20,200 are exempt from bankruptcy?

[JEM]

IIRC, not all states allow you to choose between Federal and state exemptions, so double check to make sure yours is one that does.

ETA: It appears MA allows you to choose between the 2. And after looking, you probably would be better off going with Federal--MA doesn't have very good exemptions. LOL

[Spagal]

I am in MA and apparently can use Fed.

Am I understanding the principle of it right? That $20,200 is exempt?

[Spagal]

My main concern is my paid for vehicle and what small amounts I have in savings accts etc.

[JEM]

My main concern is my paid for vehicle and what small amounts I have in savings accts etc.

[forgotten]

My main concern is my paid for vehicle and what small amounts I have in savings accts etc.

From what you have the said the federal exemptions should protect everything you have unless by small amount in savings you meant like $20k.

[Spagal]

Oh def not! I wish it was that much, I have about $3500 total which I will be drawing from for expenses.

[forgotten]

Oh def not! I wish it was that much, I have about $3500 total which I will be drawing from for expenses.

You'll be fine then, the federal exemptions should be more than enough to cover everything (which it is for most people). Nothing to worry about!

[BobMango]

Oh def not! I wish it was that much, I have about $3500 total which I will be drawing from for expenses.

In any case the federal wildcard exemptions (both the actual wildcard and the unused homestead exemptions) can be used for any property, including cash, up to the limit.

We used ours to protect about $7K in cash, then applied the rest to excess equity in vehicles, cows, guns, -- whatever didn't fit in any other category.

[Spagal]

I have no real estate. Literally all I have is a used up broken down pickup truck that I use occasionally is needed. it needs a tranny so right now its not in use. Of course I have a newer car with a note on it that I am sure is upside down and I will need to reaffirm with my credit union to keep.

Other than that I only have my personal items, clothing & shoes, used furniture and household items which from what I understand I would value at garage sale prices. Any idea where I could find index of what certain items coast? Like a toaster? or do I just list it all out and give it my own yard sale value?

How do I prove that value of the vehicles? Would kelly blue book print out be sufficient? shoudl I have my mechanic give an estimate for the new tranny to be included with the values?

Sorry I just want to make sure I have everything documented.

[BobMango]

...Of course I have a newer car with a note on it that I am sure is upside down and I will need to reaffirm with my credit union to keep.

Not sure why you need to reaffirm on the car unless you are behind and are looking to modify the terms. Otherwise the best course would be to retain and pay if possible.

Other than that I only have my personal items, clothing & shoes, used furniture and household items which from what I understand I would value at garage sale prices. Any idea where I could find index of what certain items coast? Like a toaster? or do I just list it all out and give it my own yard sale value?

Use what values you think you'd get at a garage sale. I had provided my attorney with values on a lot of individual items and he lumped them together in many cases. Unless you have very valuable artwork or other such belongings, nobody really cares about the value of your toaster.

How do I prove that value of the vehicles? Would kelly blue book print out be sufficient? shoudl I have my mechanic give an estimate for the new tranny to be included with the values?

My attorney had me pull the KBB values. I used low trade-in value and it wasn't questioned, but some jurisdictions require using private party values.

[Spagal]

Thank you BobMango.

I read your blog. Its reassuring to see that I am not alone and that lots of people go through this.

I guess I am paranoid. My atty doesn't seem to think all the minute details matter but still reading on here I would rather be over prepared than under.

[Spagal]

Oh, and I am current on the car payment but thought reaffirming was mandatory if I want to keep it?

[BobMango]

Oh, and I am current on the car payment but thought reaffirming was mandatory if I want to keep it?

Well, strictly speaking, "retain and pay" is not an option afforded by the bankruptcy code. In actual practice, most lenders will allow you to retain the property as long as you stay current. You should check with an attorney to get a clear picture of what your lender and district do.

I did reaffirm on my truck loan, but I did it because I was behind and the credit union was willing to lower my payment and bring me current if I reafffirmed. I also had about $8-9K in equity in the vehicle.

On my house, I am simply continuing to pay on the mortgage.

[Spagal]

Oh okay. Well my next meeting won't be for at least another 6 weeks, mid February and I will find out more from him at that point. I need to get my tax return to pay him before we can file.