Answer: During your free consultation, I’ll show you a list of property that can be protected under State and Federal Bankruptcy laws. The laws are quite generous and most clients never lose property in a Chapter 7 bankruptcy. We’ll consider all of your property and then take steps to maximize protection.
Protect Your House: Under R.I. General Laws § 9-26-4.1, a debtor who has lived in Rhode Island for two years, can protect as much as $ 500,000 equity in a homesteaded principal residence if she has owned the house for the previous 40 months. If she hasn’t met the 40-month ownership requirement, federal bankruptcy law caps the RI Homestead Exemption at $ 155,675. If she chooses to protect her homestead using Federal Bankruptcy Law 11 U.S.C. 522(d)(1), she can presently protect $ 22,975 equity in real or personal property used as her residence. If filing bankruptcy jointly with a spouse who co-owns the house, the spouse can also claim $ 22,975 in equity protection.
Protect Your Car/ Truck: Under R.I. General Laws § 9-26-4(13), a debtor who had lived in Rhode Island for two years, can protect $ 12,000 equity in a motor vehicle. Federal Bankruptcy Law, however, protects only $ 3,675 in equity.
Bottom Line: Having filed thousands of cases, I’ve never had a client lose a house or car, when they stayed current with their payments.