FUNDAMENTALS OF BANKRUPTCY FOR LENDERS
General Principles of Bankruptcy Law
5. EXEMPTIONS
a. Since Colonial times the law has provided that debtors may exempt limited property from the collection efforts of their creditors.
b. The policy underlying exemptions is that the creditors’ right to payment from assets such as clothing, medical appliances and tools of the trade is outweighed by the benefits of giving the debtor a fresh start and allowing the debtor to live without public maintenance and without being a burden on society.
c. These laws vary widely from state to state, both as to specific items and as to the allowed value of the exemptions.
d. Major Virginia Exemptions:
(1) $2,000 in an automobile
(2) Personal Property(a) $1,000 for clothes;
(b) $5,000 in household furnishings;
(c) wedding ring;
(d) miscellaneous jewelry;
(e) unlimited value for medical and health apparatus; and
(f) $5,000 for family heirlooms(3) $5,000 per debtor in any type of property, cash, etc.
(4) $10,000 in tools of a trade.
e. The Trustee or a creditor may object to the debtor’s claimed exemptions because the debtor was not entitled to the exemption or because it was not properly claimed.
For more information or to request a presentation regarding BAPCPA, please contact Spotts Fain attorneys, Robert H. Chappell, III (804) 697-2025 or Jennifer J. West (804) 697-2094.
