When should a debtor file a claim of exemption?

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When should a debtor file a claim of exemption?

I have a judgment against me from a credit card company which I am unable to pay and am waiting for the sheriff to eventually knock on my door. How does it work? Does the sheriff take my property first and then I file a claim of exemptionor vice versa. I have many family heirlooms of value. Will they be sold first and then the exempt dollar amount given to me? Also, If my car is worth less than the exemption amount, will my car still be taken from me or can I keep it?

Asked on June 21, 2011 under Bankruptcy Law, California

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Since there is a judgment against you which you cannot pay, you should file bankruptcy.  You list the exemptions in the bankruptcy.  You will need to select either the federal exemptions or the CA exemptions depending on which set of exemptions provides you with the larger exemption amounts for the types of personal and real property you own.  You cannot mix the exemptions.  You will need to select either all exemptions as federal or all exemptions as CA.  Since your car is worth less than the exemption amount, you can keep your car.  The exemptions are for different types of property such as vehicles, household goods, etc.  The types of heirlooms you own will determine which category of exemptions to select.  There is also a catch-all exemption category.

The type of bankruptcy you file will be either Chapter 7 or Chapter 13.  Depending on your income and other factors, you may be eligible to file Chapter 7, which is straight liquidation that eliminates your debts.  If you are ineligible to file Chapter 7, you can file Chapter 13.  Chapter 13 sets up a plan (budget) for repayment of your creditors.

Your bankruptcy should include all of your creditors and not just the one you mentioned, who has obtained a judgment against you.  You can obtain a packet of bankruptcy schedules (forms) from the bankruptcy court.


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