Can I keep my jewelry if I file for bankruptcy in Idaho?

You can keep up to $1,000 worth of rings, watches, and other jewelry in an Idaho bankruptcy; more if the items are heirlooms.

If you file for Chapter 7 bankruptcy in Idaho, the Idaho bankruptcy exemptions allow you to keep up to $1,000 total in rings, watches, and other jewelry. You might also be able to exempt up to $750 per item of jewelry if it’s a family heirloom. If you file for Chapter 13 bankruptcy in Idaho, however, you can keep all of your jewelry. Read on to get the details.

Keeping Jewelry in Chapter 13 Bankruptcy in Idaho

In Chapter 13 bankruptcy, often called a reorganization bankruptcy, you enter into a repayment plan for three to five years. Your creditors get paid through the plan – some in full and some in part. Although a Chapter 13 plan requires a long commitment, the advantage is that you get to keep your property, including jewelry. 

If you have very expensive jewelry however, that will probably affect how much you will be required to repay unsecured creditors.

Keeping Jewelry in Chapter 7 Bankruptcy in Idaho

Chapter 7 bankruptcy works differently. In Chapter 7, you must give up certain items of property. The bankruptcy trustee sells this property and uses the proceeds to repay (at least in part) your unsecured creditors.

Idaho Bankruptcy Exemptions

Not all of your property is up for grabs, however. Idaho (and all of the other states) has enacted laws that protect certain types of property. These laws are called exemptions. Some property is exempt no matter what the value, and other property is exempt only up to a dollar amount. The idea behind exemptions is that someone filing for bankruptcy should not be stripped of basic things needed for living – like shelter, clothing, furniture, a car, and the like. (Learn more about how bankruptcy exemptions work.)

Some states allow you to choose between the state exemption system and another set, called the federal bankruptcy exemptions. But Idaho is not one of these states. If you file for bankruptcy in Idaho, you must use the Idaho bankruptcy exemptions.

Keeping Jewelry Under the Idaho Bankruptcy Exemptions 

In Idaho, you can keep jewelry using the below exemptions. If you are married and filing a joint bankruptcy, you can double these amounts.

Jewelry exemption.  If you file for bankruptcy in Idaho, you can keep rings, bracelets, watches, necklaces, and other jewelry up to $1,000 in the aggregate.

Family heirloom exemption. Idaho also lets you keep heirlooms with sentimental value up to $750 per item. This exemption is limited one way, however -- you cannot exempt more than $7,500 total for all heirlooms, appliances, furnishings, books, clothing, pets, musical instruments, and family portraits.

Can you use this heirloom exemption to protect jewelry, in addition to using the jewelry exemption? According to one Idaho bankruptcy court, if an item of jewelry is a family heirloom with sentimental value, you can use the Idaho heirloom exemption to protect it. In re Mason, 254 B.R. 764 (D. Idaho 2000). That means you could exempt your grandmother’s $500 wedding ring under the heirloom exemption and at the same time, exempt your $750 watch under the jewelry exemption.

Wildcard exemption. In Idaho, you can protect up to $800 of any type of tangible property. You may use some or all of this to exempt jewelry. (Learn more in The Idaho Wildcard Exemption in Bankruptcy.)

How to Value Jewelry in Bankruptcy

The value of your jewelry for exemption purposes is the amount you would have to pay to replace each item with a used item of similar age and in similar condition.  There are various methods of determining the replacement value, but for expensive jewelry you will almost always need an appraisal. (Learn more about how to value personal property in bankruptcy.)

Other Ways to Keep Jewelry in an Idaho Bankruptcy

If you want to keep nonexempt items of jewelry, the trustee may accept other items of exempt property in exchange for the jewelry. The trustee would then sell these items instead of your jewelry to repay your creditors.

Similarly, if you have some cash, you may be able to reimburse the bankruptcy trustee for the value of the jewelry you want to keep. Again, the trustee would use this money (instead of selling the jewelry) to repay unsecured creditors.

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