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What Property Can I Keep?

Keep Most of the Property that You Own

“Exemptions” is the term for property that you can keep without having to pay your creditors.

Delaware’s exemptions are as follows:

You can have, and keep, the following property and still discharge (eliminate) debts, without paying anything on unsecured dischargeable debts:

  • $100,000 of equity in your home (after subtracting from the current market value, all liens such as mortgages and home equity loans); or $125,000 of equity for people who are disabled and totally unable to work or married couples where one spouse is over 65 years old, and for everyone starting in 2012, plus
  • a vehicle with $15,000 of equity (current retail value of the used car, minus your car loan, equals your equity), and a second vehicle with $15,000 of equity for a married couple, plus

  • retirement accounts, if they are IRS qualified, or regulated, accounts,
  • clothing, tools for work, and a few other items that have separate exemptions, and
  • at least $25,500 of other personal property for an individual, $51,000 for a married couple, which includes anything else that you own, except equity in your home.

If you have additional property that you want to keep, you may qualify for a chapter 13 bankruptcy, which involves making monthly payments, usually to pay part of your debts.

An individual can earn at least $48,415 year before it becomes an issue, and a married couple can earn at least $64,432, or more if you have children or other dependents, without having to pay anything on dischargeable debts. For people whose incomes are higher, they may still qualify for a chapter 7, and, if not, you may qualify for a chapter 13.

If you have lived in Delaware for two years, Delaware’s exemptions apply. If you have not lived in Delaware for two years, the bankruptcy exemptions for the state where you lived previously will generally apply. Frequently, the law of that other state allows you to use the federal bankruptcy exemptions.

This site is intended for general information purposes and to give you some basic information about bankruptcy law. It is not legal advice. For legal advice you need to contact me and schedule an appointment so that I can determine how the law applies to you and whether there are exceptions that apply in your case.

James C. Reed P.A. is a debt relief agency. I seek debt relief for my clients and, where appropriate, file for bankruptcy relief under the U.S. Bankruptcy Code.