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My parents filed chapter 7 bankruptcy. They received a

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letter back from the attorney...
My parents filed chapter 7 bankruptcy. They received a letter back from the attorney they hired and the letter stated, "they are over the limit on the allowable exemptions for a chapter 7".What does this mean? Their both on SS retirement and my mom has a small pension
Submitted: 11 months ago.Category: Bankruptcy Law
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9/5/2017
Bankruptcy Lawyer: Ray, Lawyer replied 11 months ago
Ray
Ray, Lawyer
Category: Bankruptcy Law
Satisfied Customers: 48,901
Experience: 30 years in civil, probate, real estate, elder law
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Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question and respond.

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Bankruptcy Lawyer: Ray, Lawyer replied 11 months ago

West Virginia Bankruptcy Exemptions

Unless otherwise noted, all law references are to the West Virginia Code.

Homestead

38-10-4 - Real or personal property used as a residence up to $25,000. Unused portion may be applied to any other property. (Amount increased to $250,000 for doctors with a medical malpractice judgment as long as liability insurance existed at the time of the incident.)

Personal Property

38-10-4 - Motor vehicle up to $2,400; clothing, household goods, furnishings, appliances, books, musical instruments, animals and crops up to $400 per item and $8,000 total; jewelry up to $1,000; health aids; lost earnings payments needed for support; personal injury recoveries up to $15,000 (pain and suffering and pecuniary awards excluded); prepaid higher education trust fund and savings plan payments; and wrongful death recoveries for a person you depended upon for support.

38-10-4 - Burial plot up to $25,000, (must be used instead of the homestead exemption).

Wages

38-5A-3 - Minimum of 30 times the federal hourly minimum wage per week. Judge may approve more for low-income debtor.

Pensions

11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).

11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,283,025.

5-10-46 - Public employees.

18-7A-30 - Teachers.

38-10-4 - ERISA-qualified benefits and IRAs needed for support.

Public Benefits

38-10-4 - Crime victims' compensation; unemployment compensation; public assistance; Social Security; disability; and Veterans' benefits.

Tools of Trade

38-10-4 - Tools, books and implements of trade up to $1,500.

Alimony and Child Support

38-10-4 - Alimony and child support needed for support.

Insurance

33-6-28 - Group life insurance policy and proceeds.

38-10-4 - Unmatured life insurance contract (except for credit life insurance contract); life insurance dividends, interest, loan, cash, or surrender value for person you depended; and unmatured life insurance contracts' accrued loan value, interest, or dividend up to $8,000 as long as the debtor owns the contract and the insured is either the debtor or a person the debtor is dependant upon.

Wildcard

38-10-4(e) - $800 plus unused portion of homestead or burial exemption, of any property.

Other

Add any applicable Federal Nonbankruptcy Exemptions.

Anything over these items are amounts can be taken by the trustee.

I appreciate the chance to help you today.Thanks again.

If you can positive rate 5 stars it is much appreciated.

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Customer reply replied 11 months ago
Ok, so a 7 you wipe debt clear, what is a 13?
Bankruptcy Lawyer: Ray, Lawyer replied 11 months ago

Thats a payment plan type bankruptcy, exemptions are the same here for Chapter 7 or 13. It could be money, an extra car, should ask t he lawyer where they are over to see what trustee will take.Also its possible they are saying their income is too high, there is a means test and they have to file Chapter 13.Chapter 13 is a long term payment plan of multiple years of austere living where you pay your wages into plan, they spend it and you get a frugal amount of money to live on.

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Bankruptcy Lawyer: Ray, Lawyer replied 11 months ago

When you file for bankruptcy in West Virginia, you must compare your income to the median income for a household of your size in West Virginia. If you income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13 instead, you can use a three-year repayment plan (rather than five years).

If your income is above West Virginia’s median income for a household of your size, you still might qualify for Chapter 7, but you will have to provide detailed information on your regular expenses and payments on secured debts by completing something called the means test to find out. Most Chapter 13 filers will also have to provide this information in a similar Chapter 13 form.

For information about each of these forms, including how to complete them, see:

  • Form 22A–Statement of Current Monthly Income and Means Test Calculation (for Chapter 7), and
  • Form 22C –Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income (for Chapter 13).

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Here’s how to find West Virginia-specific figures for these forms:

West Virginia Median Income. For a one person household in West Virginia, the median income is $40,887. For a family of four, the West Virginia median income is $61,691. You can find median income figures for other household sizes in West Virginia here.

Example. Jeremy is married and has two children. He lives with his wife and his two children. Their total household income is $58,500. He is eligible to file for Chapter 7 without completing the detailed means test calculations because his household income is less than $62,691.

Standard deductions. Forms 22A and 22C have a comprehensive list of expense categories, such as housing, transportation, food and childcare. For some of those categories (like childcare), you provide the actual amount you spend. For other categories, you plug in a predetermined amount–sometimes that figure is standard for the entire country, other times it varies by county or region.

You can find all of the West Virginia area state, county and region-specific figures that you will need to complete Forms 22A and Forms 22C on the U.S. Trustee’s website at www.justice.gov/ust. Click on "Bankruptcy Reform" and then "Means Testing Information."

Example. In West Virginia, the standard amount that you list on your means test for housing varies by county and number in your household. If you live in Raleigh County, your mortgage or rent deduction is $517 for a one-person household and $714 for a four-person household. If you live in Monongalia County, your mortgage or rent deduction is $705 for a one-person household and $973 for a four-person household. You can find housing expense standards for each West Virginia county here.

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