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Filing bankruptcy in New Hampshire

Many people believe that filing for personal bankruptcy entails complete forfeiture of possessions, including their homes. In fact, many items that you own—including your home—fall under New Hampshire’s list of exemptions.

What are exemptions?

Rather than place debtors in an even more precarious situation, bankruptcy aims to provide a means for starting anew. With this goal in mind, bankruptcy gives debtors a reprieve from creditors—known as automatic stay—and a chance to keep possession of certain types of property.

The United States Bankruptcy Code, which was amended in 2005, attempted to provide uniformity to exemptions of debtor property. Individual states, however, were given the option to opt out of the federal list of exemptions in favor of their own list, and many chose to do so. In states that did not opt out of the federal system, such as New Hampshire, debtors have the option of choosing between state and federal exemptions.

The homestead exemption

Fortunately, your home falls into the category of exempt assets which cannot be seized or liquidated in a Chapter 7 bankruptcy. The amount of your homestead exemption is limited and varies from state to state. In New Hampshire, for example, the limit to your homestead exemption is $100,000, while the federal exemption is just $20,200.

If you have equity in your home that exceeds the amount of the homestead exemption in your state, then a trustee can sell your home and distribute the proceeds to creditors. If you find that your home’s equity is greater than the exemption limit in your state, then you may want to file for Chapter 13 bankruptcy, which sets a three to five year plan for the repayment of debts.

In order to prevent people from ‘shopping around’ for states with generous limits to homestead exemptions, current law limits the amount to $136,875 for people who have recently bought a home.

Other types of exemptions

In addition to the homestead exemption, there are several other types of property that people filing bankruptcy in New Hampshire are permitted to keep:

• Clothing
• Beds
• Household furniture to $3,500
• Automobile to $4,000
• Unemployment compensation

The items mentioned above represent an incomplete list. For more detailed information about the exemptions and the liquidation process, contact an experienced bankruptcy attorney in your state.

Provided by DeBruyckere & Roth, Massachusetts bankruptcy attorneys located at 231 Sutton Street, North Andover, Massachusetts 01845