Are Household Goods and Furniture Exempt in Bankruptcy?
In most cases, you can use state or federal exemptions to keep most or all of your household goods and furniture when you file for Chapter 7 bankruptcy.
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State Exemptions for Household Goods and Furniture
All states have enacted laws that provide exemptions that can be used in bankruptcy proceedings. If a particular item of property is exempt, you get to keep it in Chapter 7 bankruptcy. (To learn more about exemptions and how they work, see our Bankruptcy Exemptions area.)
Each of the 50 states has some form of exemption that can be applied towards household goods and furniture. Some are specifically for household goods and furniture. Others simply set monetary limits which allow you to choose the item or items you wish to claim exempt up to the set amount.
Wildcard exemption. Many states also have wildcard exemptions (an exemption amount which you can apply to your choice of property). You can apply some or all of any available wildcard exemption to protect your household goods and furniture.
(To find the exemption amounts in your state, visit your state's bankruptcy page on the Bankruptcy in Your State area of this Nolo-affiliated bankruptcy site.
Federal Exemptions for Household Goods and Furniture
Federal law also has a list of bankruptcy exemptions. In some states, you can choose to use the federal exemptions instead of your state exemptions. (To learn which states can use the federal exemptions, see The Federal Bankruptcy Exemptions.)
The federal exemptions allow you to exempt household goods and furniture up to a total of $12,250. There is a $575 value limit per item and this exemption category also includes clothing, appliances, books, animals, crops and musical instruments.
Wildcard exemption. There is also a federal wildcard exemption that allows you to claim an additional $1,225 in property as exempt along with up to $11,500 in any unused homestead exemption. You can use this to protect household goods and furniture, and there is no per item limit.
Household Goods and Furniture Owned by Husband and Wife
If only one spouse is responsible for the debt and only that spouse files for bankruptcy, you might be able to claim that some household goods and furniture are exempt because they are owned by the husband and wife as tenants by the entireties.
This is complex and there are many pitfalls. It depends on whether your state and the state where the items were purchased recognizes that type of ownership (some do not or if they do, it is limited) and whether the circumstances of the purchase qualified under state law.