Edith files a Chapter 7 petition in bankruptcy.She owns the following property: (1) an automobile valued at $1,000; (2) a homestead valued at $75,000, on which First Bank holds a mortgage of $60,000; (3) personal jewelry valued at $1,100; and (4) monthly disability payments of $1,000.Assuming Edith elects to use the exemptions listed in the Bankruptcy Code, what property may Edith keep?

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Under the Bankruptcy Code, Edith may claim exemptions for certain categories of property to keep them from being sold to pay off her debts. In this case, Edith may be able to exempt her automobile (up to $4,000), her homestead (up to $25,150 in equity, plus any unused portion of her automobile exemption), and her personal jewelry (up to $1,600). Additionally, her disability payments may be exempt if they are made on account of her disability and are reasonably necessary for her support. Therefore, Edith may keep her disability payments, automobile, homestead, and jewelry.

Edith Files a Chapter 7 Petition in Bankruptcy