Filing for bankruptcy does not mean you lose all your possessions. Virginia allows residents who file for bankruptcy to take certain exemptions for assets that the court will not seize to repay debt.
These are the most common bankruptcy exemptions to know about in Virginia.
People who file for bankruptcy can keep up to $5,000 in home equity or $10,000 for a married couple, plus $500 in equity for each dependent who lives in the home. Virginia law changed in 2020 to allow an additional personal property exemption of $25,000 for the person’s principal residence. The homestead exemption can apply to a mobile home but the person must claim it before he or she files for bankruptcy. Those who do not own a home can apply the homestead exemption to the value of other personal assets.
Virginia bankruptcy exemptions for personal property include:
- Up to $6,000 in the value of a motor vehicle
- Up to $5,000 for family heirlooms and portraits
- Up to $5,000 in furniture and household decor
- Up to $3,000 in firearms
- Up to $1,000 in clothing
- Engagement and wedding rings
- The family Bible
- Medical devices prescribed by a doctor
- Pets, but not animals sold for profit
- Tools and equipment used for work, including but not limited to $10,000 in motor vehicles, machines and equipment
Virginia law allows bankruptcy filers to keep salary equaling up to 40 times the federal minimum wage. Exemptions also apply to tax-advantaged retirement accounts and pensions, public benefits, and insurance proceeds.