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Bankruptcy exemptions: Can I keep my family jewels?

Family jewels or family heirlooms are often not exempt from Chapter 7 bankruptcy proceedings. Even though many bankruptcy filers are surprised to find that a large bulk of their property will be exempt from liquidation, most luxury items like expensive jewelry, luxury cars, luxurious real estate property -- and even if they're family heirlooms -- will not be exempt from liquidation.

Here's a short list of things that you may have to let go of during your bankruptcy proceeding:

  • High-cost musical instruments unless the instruments are being used by the bankruptcy filer in a professional capacity;
  • Stamp, coin and other collections of valuable items;
  • Family heirlooms like expensive inherited jewelry, even if it has been in the family for years;
  • A second vehicle or truck;
  • Cash, stocks, bonds, bank accounts and other kinds of investments; and
  • A second home or a vacation home.

In many cases, the most valuable service that a King County bankruptcy attorney can perform for his or her client involves getting as much of the filer's property exempt from liquidation as possible in Chapter 7 proceedings. In some cases, filers have already liquidated their most expensive property on their own to pay off their debts and they may not have anything beyond the bare necessities available for liquidation purposes.

In these situations, filers are usually happy to discover that bankruptcy will not leave them possessionless. For example, you may be able to keep your family home, vehicle, furniture, appliances, clothing and other vital personal effects as these items and more will be exempt from liquidation.

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