How Does Doubling Exemptions in Bankruptcy Work?
If you’re married and decide to file jointly for bankruptcy, you might be allowed to double some your exempted property. The amount you could exempt would be based on where you live. Bankruptcy doesn’t automatically mean that you’d have to say goodbye to all your assets.
Through bankruptcy exemptions, you could keep some of your property through a Chapter 7 bankruptcy. A majority of exemptions protect against particular property types, like your wedding ring or a vehicle. Exemptions could safeguard the entire property value or a specific dollar amount of a property.
Doubling Bankruptcy Exemptions
Through doubling, both spouses could claim an exemption for the same property. For instance, in Utah, you are allowed a homestead exemption amount of $30,000. If you double this exemption, you could claim as much as $60,000 on your home, explains bankruptcy lawyers in Provo. However, take note that this only applies to property that you won jointly with your spouse and not a property that only one of you own.
The federal bankruptcy exemptions system allows doubling, which means you could safeguard a certain amount of your jointly owned property. However, there’s one caveat to federal exemptions doubling, if your state laws allow you the option to choose between state and federal bankruptcy exemptions, you could only follow one system and not mix and match exemptions from both.
Is Doubling Allowed in Every State
Not all states allow doubling, meaning that if your state only allows state bankruptcy exemptions and not federal exemptions, doubling might not be allowed. As with the federal bankruptcy exemptions system, there are certain limits regarding doubling. You can’t claim a homestead exemption if you’re not the owner of the property or if only your spouse owns it.
The doubling of bankruptcy exemptions is not allowed in all states. It is exclusively available in states that enable bankruptcy filers to opt for federal bankruptcy exemptions, or in states that don’t allow federal bankruptcy exemptions.
If you’re not sure about your state bankruptcy laws and which rules apply to you, consult a bankruptcy lawyer to help you.