Regarding the VT statute on Bankruptcy exemptions:

An exemption limit applies to any equity you have in the property. Equity is the difference between the value of the property and what is owed on the property. For example, a car valued at $5000 with a loan of $4500 has an equity value of only $500.

If the property is secured by a loan, such as a car or home, and you are current on the payments and the equity is covered by your exemptions, you may elect to keep making payments on the loan and keep this property through the bankruptcy. If all the equity is not covered by your exemptions the trustee may elect to liquidate this asset and distribute the proceeds. Generally, in this case, you would be entitled to the value of your exemption in the asset as a cash payment.

Bankruptcy law allows married couples filing jointly to each claim a full set of exemptions, unless otherwise noted.

To keep non-exempt property, a debtor must generally pay the trustee the value of the non-exempt property.

When you file bankruptcy in Vermont you may also usecertain federal exemptionsin addition to your Vermont exemptions.

ASSET

EXEMPTION DESCRIPTION

Homestead

Real property or mobile home to $75,000; may also claim rents, issues, profits & out-buildings

Spouse of deceased owner may claim homestead exemption

Property held as tenancy by the entirety may be exempt against debts owed by only one spouse

Insurance

Annuity contract benefits to $350 per month

Disability benefits that supplement life insurance or annuity contract

Disability or illness benefits needed for support

Fraternal benefit society benefits

Group life or health benefits

Health benefits to $200 per month

Life insurance proceeds if beneficiary is not the insured

Life insurance proceeds for person you depended on

Life insurance proceeds if clause prohibits proceeds from being used to pay beneficiarys creditors

Uninsured life insurance contract other than credit

Miscellaneous

Alimony, child support needed for support

Property of business partnership

Pensions

Municipal employees

Self-directed accounts (IRAs, Keoghs) to $10,000

State employees

Teachers

Other pensions

Personal Property

Appliances, furnishings, goods, clothing, books, crops, animals, musical instruments to $2500 total

Cow, 2 goats, 10 sheep, 10 chickens; 3 swarms of bees & their honey; feed to last 1 winter; 10 cords of firewood, 5 tons of coal or 500 gallons of oil; 500 gallons of bottled gas; growing crops to $5000; 2 harnesses, 2 halters, 2 chains, plow & ox yoke; yoke of oxen or steers & 2 horses

Jewelry to $500; wedding ring unlimited

Motor vehicles to $2500; bank deposits to $700

Personal injury recoveries for person you depended on

Stove, heating unit, refrigerator, freezer, water heater & sewing machines; lost future earnings for you or person you depended on; health aids

Wrongful death recoveries for person you depended on

Public Benefits

Aid to blind, disabled, aged, general assistance

Crime victims compensation needed for support

Social security needed for support

Unemployment compensation

Veterans benefits needed for support

Workers compensation

Tools of Trade

Books & tools of trade to $5000

12-2740(2)

Wages

Minimum 75% of earned but unpaid wages; bankruptcy judge may authorize more for low-income debtors

Wages, if received welfare during 2 months before filing

Wild Card

$7000 less any amount of appliances, et al, growing crops, jewelry, motor vehicle & tools of trade, of any property

$400 of any property

George is facing extreme financial distress due to job loss and an illness. He has incurred the following debts: 1. Mortgage of $75,000.00 on his home valued at $150,000.00. 2. Car debt of $5,000 on a car valued at $7,000.00. 3. Credit card debt of $10,000.00. 4. Hospital debt of $40,000.00. 5. Federal taxes incurred in the last year of $5,000.00. 6. Unsecured debt to cousin Arthur of $2,500.00. 7. Magazine subscription of $250.00. 8. Debt for a "reposed' car of $6,000.00. 9. Federal guaranteed school loan of $20,000.00. He has the following assets: A. A house with an equity value of $75,000.00. B. A car with an equity value of $2,000.00. C. Cash of $2,000.00 (held in a bank account.) D. Furniture and appliances valued at $2,500.00. E. Roth IRA valued at $10,000.00. F. Heirloom watch valued at $2,000.00.

What debts can and cannot be discharged in a Chapter 7 bankruptcy? What assets can the debtor keep? Are there any assets that the debtor cannot keep? What must the debtor allege and prove in order to discharge the student loans? What about the wildcard exemption?