The Kansas bankruptcy exemptions are not particularly generous when it comes to rings, watches, and other jewelry. If you file for Chapter 7 bankruptcy in Kansas, you can keep up to $1,000 in jewelry; more if you are married and filing a joint bankruptcy. If you file for Chapter 13 bankruptcy, however, you can keep all of your property, including your jewelry.
Keeping Jewelry in Chapter 13 Bankruptcy in Kansas
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 Kansas
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.
Kansas Bankruptcy Exemptions
Not all of your property is up for grabs, however. Kansas (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 Kansas is not one of these states. If you file for bankruptcy in Kansas, you must use the Kansas bankruptcy exemptions.
Keeping Jewelry Under the Kansas Bankruptcy Exemptions
In Kansas, you can keep jewelry using the below exemptions. If you are married and filing a joint bankruptcy, you can double these amounts.
- Jewelry exemption. In Kansas, you can exempt up to $1,000 of your jewelry and other items of adornment.
- Wearing apparel exemption. Kansas allows you to exempt clothing that you will need for one year. Some bankruptcy courts have interpreted other states’ wearing apparel exemption to cover a reasonably-priced watch. It’s possible you could exempt a watch in Kansas under the wearing apparel exemption – check with a local bankruptcy attorney.
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 a Kansas 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.