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Is It or Isn’t It Covered? Personal Exemptions When Filing for Bankruptcy

Posted on July 26th, 2013

When filing for personal bankruptcy, many believe that creditors will lay claim to all of your possessions in order to repay debts. However, within the U.S. and South Carolina law books, there are a set of laws commonly referred to as “asset protection.”  These laws are put in place to make sure that people who have filed for bankruptcy can maintain certain assets.

There are two key provisions of asset protection; what property can and cannot be protected and who is able to apply for exemptions.

US bankruptcy exemption law includes protection for:

  • A percent of wages
  • Social Security benefits
  • Civil Service benefits (such as working for the U.S. Department of  Foreign Affairs)
  • Veterans benefits

Within South Carolina there are additional exemptions:

  • Homestead (real property including co-op) or burial plot exemption up to $53,375 with joint-owners allowed to double exemption to $106,750
  • Cash or liquid asset exemption up to $5,625 in lieu of the homestead exemption
  • Motor vehicles exemption up to $5,625
  • Tools of trade (items necessary for employment) exemption up to $1,675
  • Jewelry exemption up to $1,125
  • Wild Card (any property from unused exemptions for homestead, burial, motor vehicle, personal property, or tool of trade exemptions) up to $5,625

An individual debtor must have an ownership interest in the property in order to claim any of the above excemptions.

Exemptions for alimony, child support, disability services, pensions, and life insurance are handled on a case by case basis.  For any additional information on what exemptions you may qualify for, please contact Skinner Law Firm LLC.