Are My Clothes Exempt in Bankruptcy?
Most people can keep their clothing when they file for Chapter 7 bankruptcy.
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Usually, your clothing is protected when you file bankruptcy. Most states have exemptions that either specifically protect your clothing, up to a certain value, or allow you to protect a certain amount of value in your clothing, household goods and personal effects combined. Regardless of whether your state has a clothing exemption, it may have a wildcard exemption that you can combine with the clothing exemption or use independently to protect your clothing.
(To learn more about how exemptions work, the clothing exemption amounts in your state, and how to use a wildcard exemption, see the articles in our Bankruptcy Exemptions area.)
You are required to list the fair market value of your clothing in your bankruptcy petition. When asked how much all of their clothing is worth, many people are confused or indicate a value close to what they paid for their clothing. Bear in mind that your clothing, once purchased and worn, is now secondhand. For the purpose of your bankruptcy, the value of your clothes is how much money you would receive if you sold your clothes, as is, today. Notwithstanding furs or unique or designer items that may have considerable value, people’s clothing often falls within the protected amount, meaning they can file bankruptcy and keep their clothing.