When you think about filing for bankruptcy, it may seem at first like an overwhelming task. One of your major concerns is sure to be about assets: What will you be able to save?
The thought of losing your home, your car or other possessions is frightening, but remember that you will be able to take advantage of exemptions. One of these is the federal wildcard exemption.
Chapter 7 is the most common form of bankruptcy, although there are others, including Chapters 11 and 13. An attorney can help determine the type of bankruptcy that would be the best fit for you, and the discussion will no doubt cover exemptions. When filing Chapter 7, you can use either the Kentucky state exemptions or federal exemptions, but not both. These are designed to help you keep as many of your important possessions as you can, including big-ticket items like your home and car.
Doubling the federal exemptions
Here is an example to consider: If you and your spouse file bankruptcy jointly, you are permitted to double all federal bankruptcy exemptions. The listed homestead exemption for real property stands at a maximum of $23,675 per individual, so together, you and your spouse could claim a homestead exemption of $47,350.
Where the wildcard comes in
If you choose to go with federal exemptions, you can use the federal wildcard. Readjusted every three years, the current wildcard, set in 2016, is $1,250 per person, plus up to $11,850 of any unused part of your federal exemption for homesteads. However, perhaps the most interesting fact about the wildcard exemption is that it can be used for anything. For example, you could use it to help save your car, the money in your bank account or your rare coin collection.
Home ownership is such an important concern for anyone going through bankruptcy, but your home is just one of the assets you will be concerned about. An experienced bankruptcy attorney understands what you are going through when you decide to file and can help you make informed choices when it comes to a range of topics, including the possibility of applying the federal wildcard exemption.