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Explaining the wildcard exemption

When people file for Chapter 7 bankruptcy protection in Salem, their immediate concerns often surround their personal property, specifically how much of it they will and will not be able to keep. Both state and federal laws have put exemptions in place that allow bankruptcy filers to protect their equity and ownership in certain items, such as their homes, cars, and some high-dollar assets. In New Hampshire, those filing for bankruptcy are allowed to choose which exemption guidelines they’ll follow. Yet the question of which exemptions to apply is often overshadowed by concerns over what, if any, protections are afford for assets not considered to have a high financial value.

Both federal and state exemptions include provisions for personal items. Those not classified under a particular category may still be covered under what is known as the “wildcard” exemption. According to state statutes, the wildcard exemption in New Hampshire is up to $1,000, plus as much as $7,000 of any unused portion of the following exemption categories:

  •          Household furniture (up to $3,500)
  •          Provisions and fuel (up to $400)
  •          Books (up to $800)
  •          Trade tools (up to $5,000)
  •          Vehicle (up to $4,000)
  •          Jewelry (up to $500)

The New Hampshire Bar Association lists the federal wildcard exemption as $1,225, plus any part of the unused exemption towards a home not exceeding $11,500. One may wonder why, given the larger amount offered through the federal exemption, why anyone would choose to follow state guidelines for this category. However, it should be remembered that exemptions cannot be mixed; if one chooses to follow state guidelines, he or she agrees to adhere to them across all categories. Thus, while the wildcard exemption may be lower, other state categories could offer more advantages over federal guidelines. 

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