Jan 05, 2010

California, North Carolina, Wisconsin increase bankruptcy exemptions

Debtors in three states will enjoy larger exemption amounts in 2010, thanks to legislation passed late last year. 

The California homestead exemption increased by $25,000 as of January 1, 2010. The current amounts are $75,000 for individuals, $100,000 for couples, and $175,000 for seniors (over 65), disabled or over 55 with limited income, effective January 1, 2010, thanks to legislation signed by Governor Schwartzeneger in late last year. (See articles about the new law, AB 1046,  here and here.)

North Carolina homestead exemption increased from $18,500.00 to $35,000.00, and to $65,000 if you are 65 years of age and your spouse (or possibly life partner) with whom you owned the property as tenants by the entirety (for spouses only) or Joint Tenants With Right of Survivorship (JTWROS), and your spouse or partner passed on before you.  The changes became effective December 1, 2009. See information about the changes here and here.

Wisconsin bankruptcy exemptions increased in December 2009. The homestead exemption was at $40,000 and is now at $75,000, and, even better for married debtors, that amount can now be doubled to $150,000 when filing jointly. More details here and here.

Other changes to Wisconsin exemptions include:

Consumer goods exemption raised from $5,000 to $12,000
Motor vehicles exemption raised from $1,200 to $4,000
Tools of trade exemption raised from $5,000 to $12,000
Personal injury exemption raised from $25,000 to $50,000

These changes mark a trend recently for states to revisit their exemption laws and increase them as a way of helping people hang on to a minimal amount of property as they struggle to regain their footing in this tough economy. 

To learn more about what happens if you own a house and file for Chapter 7 bankruptcy, see Nolo's article Your Home in Chapter 7 Bankruptcy. For more information on bankruptcy in general, including articles on whether you'll lose your house or car in bankruptcy, see Nolo's Bankruptcy Center.