1. Using the federal list, the total amount of exemptions that Wilma would be allowed is $26,450.
2. Using the state list, the total amount of exemptions that Wilma would be allowed is $25,350.
3. The federal list will be more favorable for her.
Data and Calculations:
Wilma's Assets Federal List State List
Equity in house = $14,250 $14,250 $14,250
Car = $2,700 2,400 1,500
Household goods
(limited to $400 for a
single item) = $9,000 8,000 9,000
Jewelry = $1,100 1,000 500
Other property = $900 800 100
Total $27,950 $26,450 $25,350
Question Completion:
LIST A. FEDERAL EXEMPTIONS
Equity in home .......................................$15,000
Motor vehicle .............................................2,400
Household goods .......................................8,000
($400 limit for a single item)
Jewelry .......................................................1,000
Other property ..............................................800
Tools (for debtor’s trade) ...........................1,500
Total Federal Exemptions = $28,700
LIST B. STATE EXEMPTIONS
Equity in home ....................................... $25,000
Motor vehicle ............................................. 1,500
Household goods ..................................... 10,000
($1,000 limit for a single item)
Jewelry .......................................................... 500
Other property .............................................. 100
Tools ........................................................... 5,000
Total State Exemptions = $42,100
Thus, in computing exemptions under the Chapter 7 bankruptcy, Wilma should choose the federal list instead of the state list because the federal list is more favorable with higher exemptions than the state list.
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