What is an "Exemption" in Bankruptcy ?

In the state of California, a person who files bankruptcy has access to a pretty liberal set of protections, called "exemptions," that allow a bankruptcy petitioner to retain a substantial amount of property.  This topic is a very serious one, and before an individual considers filing bankruptcy in any jurisdiction or venue, not just San Diego County, he/she should seek the advice of a competent bankruptcy professional.  Make an appointment in our Chula Vista, downtown San Diego, or North County Vista office to discuss what "exemptions" are available to you.


Hi There, Dan Wiedecker back at Debt Relief Legal Clinic. 

Just a quick short vide to explain a term that sometimes can be confusing or misconstrued as it relates to the collection in the bankruptcy world. 

That term is "exemption."

Exemption simply refers to the protections that you can apply to properties. There are some fallacies out there that if you file for bankruptcy, whether it be Chapter 7 or Chapter 13, that you can't protect any property. And that's patently not true. 

Every state has a set of protections that allow a person to preserve property from creditors, and those protections overlay into bankruptcy. 

So, when you file for bankruptcy in a state, you will be availed the protections of that state, assuming you meet the rules of having been there long enough, which is 2 years. 

If you haven't been there 2 years, you have to go through that exemption process of figuring out whether you are going to use the federal set of exemptions, or which state you came from. 

So, a good reason to seek competent, professional advice to help with an exemption scheme.

But the good news is, there typically is enough legal based protection for everything you have.

Obviously you can go to your local public law library and look at Nolo publications to see what protections are offered in your state.

Or go to NACBA.org and do the attorney search for your state, and give them a call. Do a phone consultation, Zoom meeting, Zoom consultation, or live if you can to assess.

And most consultations are almost always going to be free.

But exemptions simply refer to protections for property. And the good news is they're generally sufficient to protect everything you have - from your car to your bank account to your retirement, to even real estate. 

So, need not worry, and just reach out. I always say it's worth the price of admission for a free consultation. 

Thank you for listening.