Bankruptcy law can vary state to state and it's important you have a bankruptcy attorney to help guide you through your own state regulations and policies.
Bankruptcy filings are a federal court matter however certain aspects of bankruptcy law very state-by-state in regards to what property is exempt a bankruptcy filing. For example six states including Florida and Texas have an unlimited homestead protection amount for your personal residence to be excluded from a bankruptcy,
however other states have capped amounts that very state-by-state.
The 2005 bankruptcy laws made several changes for consumers filing for Chapter 7 or Chapter 13 bankruptcy, making it more complicated to file and as a result more time-consuming for your bankruptcy attorney and more expensive for you. The good news though federal exemption limits were raised which allows consumers to keep more of their assets when filing for a discharge instead of having those assets seized and sold to pay off creditors.
In fifteen states you can choose to use either a federal or state exemption list. Keep in mind most state exemption rules are more favorable than federal. The federal bankruptcy exemptions for example allow you to keep a vehicle valued at or under $2,400 and also allows you to keep household furniture up to $8,000, jewelry up to $1,000, tools of your trade up to $1500 and other property valued up to $7,500. Your state may offer you a more favorable and higher exemption rate on the same assets. It's important if you live in one of the 15 states that allow you to choose between federal or state exemption you understand your options and talk to your lawyer about which exemption list is the best one for you to use.
Bankruptcy law also recognizes that certain income is exempt from being seized or garnished including Social Security, unemployment or disability, veteran's benefits or alimony. And while some income may be exempt, some debts are not, including child support or alimony, debts incurred for a willful or malicious injury or death to another, student loans and IRS debt.
Bankruptcy law can also be affected by the state if it is a common property states such as Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin. In these community property states one spouse may file for bankruptcy without the other spouse however in the community property states this is does not file will assume the entire debt under state law.
This is one of the reasons it is important to consult a bankruptcy attorney in your state to help you understand how a chapter 7 discharge will affect you, your spouse, and your future credit since bankruptcy law can vary from state to state.
General information about a discharge can help guide you, and certainly help give you some expectations about what to expect, but you need to fully understand your own state regulations and policies and that can only be properly accomplished through talking to an experienced and qualified bankruptcy law attorney in your state.
