Bankruptcy Myth – You will lose all of your property when you file bankruptcy
Short Answer – Not likely.
The Bankruptcy Code requires the debtor to disclose all of their assets to the Court and the Trustee. This disclosure must accurately describe and give a reasonable value for their assets/property.
Your assets include everything from your bank accounts, home, vehicles, household furniture, jewelry, retirements and tax refunds.
And reasonable valuation generally means rummage sale value for home goods but can also mean liquidation value for jewelry or assessed/appraised value for homes.
In Wisconsin residents are able to use either the federal or Wisconsin exemptions to protect and therefore keep their property. Choosing which exemption scheme (federal or state of Wisconsin) will depend upon the net value of your property. Net value is the difference between what you owe and the value of the property. This determination should be made with your bankruptcy attorney.
Generally, you would start choosing your exemption scheme by the highest net value item. Which is usually your house. Currently (as of June 2016) the exemptions will protect the following asset values:
Federal
Single/Joint
Home $23,675/$47,350
Vehicle $3,775/$7,550
Household Goods $12,625/$25,250
Jewelry $1,600/$3,200
Tools of the Trade $2,375/$4,750
Retirements (ERISA) Most Unlimited
Wisconsin
Single/Joint
Home $75,000/$150,000
Vehicle $4,000/$8,000
Household Goods $12,000/$24,000
Jewelry included in household goods
Tools of the Trade $15,000/$30,000
Retirements (ERISA) Most Unlimited
The above figures were taken from 11 USC 522 for the federal exemptions and Wisconsin Statute Section 815.18. The values are updated yearly.