Further Protect Your Assets With Federal Non-Bankruptcy Exemptions

Law Blog

When you file for bankruptcy, you are entitled to a number of official state or federal exemptions you can use to prevent the court from taking certain money and property. In New Hampshire, for instance, you can keep up to $5,000 from the proceeds of a homeowner's insurance claim. However, there are also a few unofficial exemptions you may qualify for that can protect even more of your assets. Here's what they are and the qualification requirements.

Federal Non-Bankruptcy Exemptions

The federal non-bankruptcy exemptions fall into four categories:

• Retirement Benefits for civil, railroad, military, and foreign service employees, veterans, Social Security recipients, and those on the military Medal of Honor roll
• Survivor's Benefits for judicial employees, lighthouse workers, and those who have completed military service
• Death and Disability Benefits for longshoremen, harbor, and government workers, and people who are risk of dying or have died in war
• Miscellaneous including military deposits made while the active duty member was overseas, money from property sold or leased on Indian land, and unemployed benefits for railroad workers

These exemptions address the needs and rights of people in specific groups, so they're not available to everyone who files for bankruptcy. However, if you're a member of one of the protected groups, you can claim an unlimited amount of value for the asset the exemption covers in most cases.

For example, there is no upper limit for death and disability benefits for longshoremen and harbor workers, government workers, and people who were hurt or at risk of being hurt in a war. Thus, if you work (or did work) on a boat, the trustee in your case won't be able to confiscate any disability benefits you were awarded for injuries you sustained while employed in that position.

Qualification Requirements

As noted previously, you must be a member of the specified group to claim the exclusions on your bankruptcy petition. Additionally, though, you can only claim these exemptions if you use your state's official bankruptcy exemptions rather than the federal ones. In some states, you are required to only use the exemptions provided in local laws. However, in others, you are given a choice between the federal or state exemptions. If you want to use the federal non-bankruptcy exemptions then you must opt for your state exemptions in this case.

For more information about using federal non-bankruptcy exemptions to protect your money and property or help filing for bankruptcy, contact an attorney from a place like Martinez Law Firm.

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26 February 2018