You want to declare Chapter 7 bankruptcy, but you know that that means you’ll have to liquidate some of your assets. This is concerning to you because you have jewelry that you would like to keep. You know that it’s valuable, but you don’t want to be forced to sell it just to pay off your debts.
What you’re wondering is if you can declare bankruptcy but have this jewelry be exempt. Is that possible under the current laws?
Some jewelry is already exempt
In some cases, depending on what you want to keep, it may already be exempt. For example, in Connecticut, you do not have to sell a wedding ring or an engagement ring. You’re allowed to keep things like this without them counting toward your bankruptcy case.
You can use other exemptions
You can also protect other types of jewelry by using the $1,000 wildcard exemption. This is all that is offered under state law, but you also have the option of using federal bankruptcy laws, which could increase that wildcard exception to $1,475.
Can you keep it all?
Whether or not you can keep all of your jewelry may depend on exactly how large that collection is. If you simply have a wedding ring and a few small pieces that you wear sometimes, odds are that they will easily fit under the current exemptions. But larger collections may mean that you need to make some choices about which pieces you’re going to keep and which ones are going to have to be liquidated.
As you work your way through this process, be sure you know exactly what legal steps you’ll need to take and what obligations you have.