If you are considering bankruptcy protection under Chapter 7 or Chapter 13 bankruptcy in the State of Nevada, you have some choices to make regarding your personal property. While it is true that the bankruptcy trustee can liquidate some of your property, you are granted certain bankruptcy exemptions that allow you to exempt some of your property from being auctioned by the trustee. If you own jewelry you hope to keep out of reach of the trustee, there is an exemption for that. But like in most cases, the exemption available for jewelry isn't limitless. Here are five things you should know about exempting jewelry in a Nevada bankruptcy.
1. The Exemption for Jewelry is Capped at $5,000
You can exempt any amount of jewelry up to a total value of $5,000. This exemption differs from some other exemptions like the homestead exemption, where it applies to the equity you have in an asset as opposed to the value. This makes sense, as most jewelry is owned outright. This personal property exemption can be used on a single piece of jewelry or a collection, so long as the combined value is at most $5,000. Any jewelry that is not covered by an exemption can be sold by your bankruptcy trustee to pay your creditors.
2. The Exemption for Jewelry also Covers Art, Books, and Musical Instrument
A critical thing to know about this exemption is that while it covers art, it does not cover art exclusively. The $5,000 exemption is actually for all art, books, and musical instruments that you want to keep. While you can obviously use the exemption entirely on jewelry, you will have some decisions to make if there are also valuable books or instruments you hoped to hang on to.
3. It Helps to Have Your Jewelry Professionally Appraised
Having the value of your jewelry determined by a trained appraiser will be very beneficial to you. For obvious reasons, it is impossible to determine how to allocate your exemptions if you aren't certain what each piece is worth. In the end, you could find the jewelry you had planned to exempt is worth far more than the $5,000 allotted. It's best to know that going in.
4. You Can Use Your Wild Card Exemption for Jewelry As Well
If you have more than $5,000 in jewelry you want to keep, there is another option. You have what is known as a Wildcard Exemption that can be used for any property that you wish. If you have more than $5,000 in jewelry or want to use that exemption for musical instruments or art, you can instead cover some of your jewelry with the Wildcard. Your Wildcard Exemption can cover up to $10,000 in assets.
5. A Nevada Bankruptcy Can Advise You on How to Best Allocate Your Exemptions
There are dozens of potential Nevada bankruptcy exemptions, and the jewelry exemption is only one small piece to the puzzle. To get a better picture of how these exemptions can affect your bankruptcy estate, contact Vohwinkel Law for a free consultation today.