Eric Lester Leinbach, Esquire
1603 Butler Street, Easton, PA 18042
610-258-5859 Email:

Serving all of Eastern Pennsylvania
and Northern and Central New Jersey.


                       TOPICS and ISSUES in Bankruptcy



A person in bankruptcy is allowed to exempt $25,150 in equity, per person on the deed of their home. That means, if the property is owned by a husband and wife then, you can exempt $50,300. If you own a home with the fair market value of $251,000, and that home has a $200,000 mortgage, then you can exempt the equity of $50,300, and keep your home. Most people can fully exempt their home. If you cannot fully exempt your home, there are other options, however they are more complicated.

Equity in motor vehicles can be exempted up to $4000 per person on the title. If a husband and wife owns a car with the fair market value of $28,000 and there is loan which has a lien against the vehicle for $ 20,000, then you can exempt the $8000 in equity in the vehicle, and keep the vehicle. If the equity in your vehicle exceeds the exemption limits there are other options, but they are more complicated.

Individuals can exempt $13,400 in household goods. A husband and wife living together can exempt $26.800 in household goods. Very few people nowadays have a liens on their household goods. What that means is if you took all the things in your house and sold them would you get more than $13,400 if you are an individual or $26,800 if you were couple? Most people cannot sell all the items in their house and exceed the foregoing limitations, therefore all the property would be exempt.

Debtors in bankruptcy are permitted to have $1700 in equity in jewelry. For a couple that would mean $3400. Jewelry as with all other items of property are based not on the purchase price but rather on the fair market value. The fair market value is the amount you could obtain if you sold your jewelry. Jewelry has a very high markup. A person could spend $4500 on a very nice diamond ring, however if you try to resell it you'll probably only get $1500 for that ring. Exemptions are calculated based on fair market value less the amount of any lien. If the equity that you have exceeds the exemption limit, then you may use the "wildcard" exemption to further increase the allowed exemption.

If you have cash value life insurance you can exempt $13,400 of that cash value. There are other ways to increase the amount of the exemption for life insurance.An individual can exempt up to $2,525 in tools of their trade. That's not the cost of the tools, but rather how much the tools could be sold for. If the fair market value of the tools a person has is greater then the exemption limit, then the wildcard exemption can be used to increase it. If you have a lawsuit because of a personal injury you can exempt $25,150 of the proceeds from that lawsuit, which can be doubled if you're a husband and wife. The amount that can be exempted is after costs expenses and attorneys fees of that lawsuit.

Individuals are entitled to a "wildcard" exemption equal to: $1,325, plus $12,575 in any unused residential property exemption, which can be used on anything or to supplement other exemptions. There are many other exemptions, including but not limited to: Health aids: exempt without regard to value, Unmatured life insurance: exempt without regard to value, Life insurance payments: amount needed for support under a policy taken out by someone of whom you were a dependent.

The total list of exemptions is even more extensive than set forth above, however the foregoing list are the more common exemptions that people use. It is important that you meet with an experienced and competent attorney to explore the exemptions you are entitled to more extensively. State exemptions are totally different, and each state's exemptions are different. A knowledgeable and experienced attorney can advise you if state exemptions would be more beneficial for you.


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Eric Lester Leinbach, Esquire
Bankruptcy Attorney
1603 Butler Street, Easton, PA 18042

Serving all of Eastern Pennsylvania
and Northern and Central New Jersey.




Disclaimer and Limitation of Use : The information on these pages is not intended as legal advice but rather general information. Reading or using the information on this website does not establish an Attorney-Client relationship. Such a relationship can only be created with the express written consent of an Attorney and the Client. The Bankruptcy Statute and Court Rules are complex. The answers to frequently asked questions at this site are only intended to provide a general information concerning the bankruptcy statute and rules. Individuals should always consult with an experienced bankruptcy Lawyer before making any decision or taking any action. We are proud to be a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code. We are proud to be a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code. I offer a free initial consultation by appointment only. I am licensed to practice in both Pennsylvania and New Jersey.