issued after the publication date of this book will not be reflected in the chart. (see Ch. 10 for information on doing your own legal research; you can find the latest exemption laws at www.legalconsumer.com.)
Think Creatively About Exemptions
“Tools of the trade” is a common exemption category. The term used to mean hand tools, but now it refers more broadly to the things you need in order to do the job you rely on for support.
Here are some examples of property that could be considered tools of the trade in various fields:
• Art camera, scanner (artist)
• Car, truck, or van that is used for more than just commuting (sales manager, insurance adjuster, physician, firewood salesperson, traveling salesperson, real estate salesperson, mechanic)
• Cream separator, dairy cows, animal feed (farmer)
• Drills, saws (carpenter)
• Electric motor, lathe (mechanic)
• Guitar, acoustic amplifier, coronet, violin and bow, organ, speaker cabinet (musician)
• Hair dye, shampoo, cash register, furniture, dryer, fan, curler, magazine rack (barber, beauty parlor operator)
• Oven, mixer (baker)
• Personal computer, printer (insurance salesperson, lawyer, accountant)
• Photographic lens (photographer)
• Power chain saw (firewood salesperson)
• Sewing machine (tailor)
• Truck (logger, tire retreader, truck driver, farmer, electrician).
Review the tools of the trade exemption rules available to you carefully—you may be pleasantly surprised by what you can keep.
CHAPTER 3: YOUR PROPERTY AND BANKRUPTCY 55
Personal Property Checklist
Microwave oven
Patio or outdoor furniture Radios
Rugs
Sewing machine Silverware and utensils Small appliances Snow blower Stereo system
Telephone and answering machines Televisions
Vacuum cleaner
Video equipment (VCR, camcorder)
Books, pictures, and other art objects; stamp, coin, and other collections
Art prints Bibles Books Coins
Collectibles (such as political buttons, baseball cards) Family portraits
Figurines Original artworks Photographs
Records, CDs, audiotapes Stamps
Videotapes Apparel
Clothing Furs Jewelry
Engagement and wedding rings Gems
Precious metals Watches Cash on hand (include sources)
In your home In your wallet Under your mattress
Deposits of money (include sources) Bank account
Brokerage account (with stockbroker) Certificates of deposit (CDs)
Credit union deposit Escrow account Money market account Money in a safe deposit box Savings and loan deposit Security deposits
Electric Gas Heating oil
Security deposit on a rental unit Prepaid rent
Rented furniture or equipment Telephone
Water
Household goods, supplies, and furnishings Antiques
Appliances Carpentry tools China and crystal Clocks
Dishes
Food (total value)
Furniture (list every item; go from room to room so you don’t miss anything)
Gardening tools
Home computer (for personal use) Iron and ironing board
Lamps
Lawn mower or tractor
Firearms, sports equipment, and other hobby equipment Board games
Bicycle
Camera equipment
Electronic musical equipment Exercise machine
Fishing gear
Guns (rifles, pistols, shotguns, muskets) Model or remote-controlled cars or planes Musical instruments
Scuba diving equipment Ski equipment
Other sports equipment
Other weapons (swords and knives) Interests in insurance policies
Credit insurance Disability insurance Health insurance
Homeowners’ or renters’ insurance Term life insurance
Whole life insurance Annuities
Pension or profit-sharing plans IRA
Keogh
Pension or retirement plan 401(k) plan
Stock and interests in incorporated and unincorporated companies
Interests in partnerships Limited partnership interest General partnership interest
Government and corporate bonds and other investment instruments
Corporate bonds Municipal bonds Promissory notes U.S. savings bonds
Accounts receivable
Accounts receivable from business Commissions already earned Family support
Alimony (spousal support, maintenance) due under court order
Child support payments due under court order Payments due under divorce property settlement Other debts for which the amount owed you is known and definite
Disability benefits due Disability insurance due
Judgments obtained against third parties you haven’t yet collected
Sick pay earned
Social Security benefits due
Tax refund due under returns already filed Vacation pay earned
Wages due
Workers’ compensation due
Any special powers that you or another person can exercise for your benefit, other than those listed under “real estate”
A right to receive, at some future time, cash, stock, or other personal property placed in an irrevocable trust Current payments of interest or principal from a trust General power of appointment over personal property An interest in property due to another person’s death
Any interest as the beneficiary of a living trust, if the trustor has died
Expected proceeds from a life insurance policy where the insured has died
Inheritance from an existing estate in probate (the owner has died and the court is overseeing the distribution of the property), even if the final amount is not yet known Inheritance under a will that is contingent on one or
more events occurring, but only if the owner has died
CHAPTER 3: YOUR PROPERTY AND BANKRUPTCY 57
All other contingent claims and claims where the amount owed you is not known, including tax refunds, counter- claims, and rights to setoff claims (claims you think you have against a person, government, or corporation, but you haven’t yet sued on)
Claims against a corporation, government entity, or individual
Potential tax refund on a return that is not yet filed Patents, copyrights, and other intellectual property
Copyrights Patents Trade secrets Trademarks Trade names
Licenses, franchises, and other general intangibles Building permits
Cooperative association holdings Exclusive licenses
Liquor licenses Nonexclusive licenses Patent licenses Professional licenses Automobiles and other vehicles
Car
Minibike or motor scooter
Mobile or motor home if on wheels Motorcycle
Recreational vehicle (RV) Trailer
Truck Van
Boats, motors, and accessories
Boat (canoe, kayak, rowboat, shell, sailboat, pontoon, yacht)
Boat radar, radio, or telephone Outboard motor
Aircraft and accessories Aircraft
Aircraft radar, radio, and other accessories Office equipment, furnishings, and supplies
Artwork in your office
Computers, software, modems, printers Copier
Fax machine Furniture Rugs Supplies Telephones Typewriters
Machinery, fixtures, equipment, and supplies used in business Military uniforms and accoutrements
Tools of your trade Business inventory
Livestock, poultry, and other animals Birds
Cats Dogs
Fish and aquarium equipment Horses
Other pets
Livestock and poultry Crops—growing or harvested Farming equipment and implements Farm supplies, chemicals, and feed
Other personal property of any kind not already listed Church pew
Health aids (such as a wheelchair or crutches) Hot tub or portable spa
Season tickets
Using the Property Exemption Worksheet now that you have a comprehensive list of your property, you can decide how to use the exemptions available to you to your best advantage. this will require you to come up with a value for each item, decide which exemption system to use (if you have a choice), then figure out how to apply those exemptions to your property.
to do this, use the Property exemption worksheet in appendix 2. a portion of the worksheet is set out below. as you can see, it includes four columns:
1. a description of the property 2. the property’s replacement value
3. the exemption (if any) that applies to the property, and
4. the number of the statute where that exemption appears (you’ll need this information when you complete your bankruptcy forms).
Complete each of these columns following the instructions below.
Column 1: using your completed checklist as a guide, describe each item of property and its location.
For personal property, identify the item (for example, 1994 Ford Mustang) and its location (for example, residence). For cash on hand and deposits of money, indicate the source of each, such as wages or salary, insurance policy proceeds, or the proceeds from selling an item of property. although cash on hand is usually not exempt, you may be able to exempt all or some of
it if you can show that it came from an exempt source, such as unemployment insurance.
Column 2: enter the replacement value of each item of property in Column 1. (under the former rules, filers used the market value—what they could get for the property if they sold it at their own garage sale.
the new bankruptcy law requires filers to use the replacement value, which is typically a higher figure.)
it’s easy to enter a dollar amount for cash, bank deposits, bonds, and most investment instruments.
For items that are tougher to value, such as insurance, annuities, pensions, and business interests, you may need to get an appraisal from someone who has some financial expertise.
For your other property, estimate its replacement value—that is, what you could buy it for from a retail vendor, considering its age and condition. as long as you have a reasonable basis for your estimates, the lower the value you place on property, the more of it you will probably be allowed to keep through the bankruptcy process. But be honest when assigning values. trustees have years of experience and a pretty good sense of what property is worth. it’s okay to be wrong as long as you have an arguable basis for the value you list and briefly explain any uncertainties. if you can’t come up with a replacement value, leave this column blank. if you file for bankruptcy, you can simply indicate that the value is unknown. if the trustee is concerned about the value, you will be asked at your creditors’ meeting to provide more detail.