Whether you can keep wedding rings, watches, necklaces, and other jewelry in New Hampshire depends on what type of bankruptcy you file (Chapter 7 or Chapter 13), whether you use the New Hampshire or federal bankruptcy exemptions, how much the jewelry is worth, and whether you need to protect other assets as well.
The New Hampshire bankruptcy exemptions have a specific jewelry exemption that allows you to keep jewelry items up to a combined total value of $500. New Hampshire also has two wildcard exemptions which you can use to protect jewelry. The federal exemptions also have jewelry and wildcard exemptions that you can use to keep rings, watches, and other jewelry in bankruptcy.
Keeping Jewelry in Chapter 13 Bankruptcy in New Hampshire
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 New Hampshire
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.
New Hampshire Bankruptcy Exemptions
Not all of your property is up for grabs, however. New Hampshire 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.)
In New Hampshire, you can choose to use either the New Hampshire bankruptcy exemptions or another set of exemptions called the federal bankruptcy exemptions (17 other states and the District of Columbia also allow you to use the federal exemptions). Whichever set you choose, you must stick with it -- you cannot mix and match from each set. For this reason, it’s important to review all of the exemptions in each system. You wouldn’t want to pick one system in order to keep jewelry, only to lose your house. (Review the New Hampshire bankruptcy exemptions and the federal bankruptcy exemptions.)
Keeping Jewelry Under the Federal Bankruptcy Exemptions
There are several provisions of the federal bankruptcy exemption system that you can use to keep your jewelry. If you are married and filing a joint bankruptcy, you can double these amounts.
Jewelry exemption. You can keep up to $1,550 of your jewelry.
Wildcard exemption. You can keep up to $1,225 of any type of property, including your jewelry. If you don’t want to use the wildcard to protect other property, you can put the full $1,225 towards your jewelry.
Unused homestead exemption. If you don’t use the homestead exemption, or only use part of it, you can use up to $11,500 of the remaining amount for anything you want, including your jewelry. The federal homestead exemption is $22,975.
Using the New Hampshire Bankruptcy Exemptions to Keep Jewelry
In New Hampshire, you can use the following exemptions to protect some items of jewelry. If you are married and filing a joint bankruptcy, you can double these amounts.
Jewelry exemption. In New Hampshire, you can claim an exemption for wedding rings, watches, bracelets, necklaces, and other jewelry up to a total value of $500. N.H. Rev. Stat. Ann. §511:2(XVII).
Clothing exemption. New Hampshire allows you to exempt your clothing, to an unlimited value. N.H. Rev. Stat. Ann. §511:2(I). Some bankruptcy courts in other states have ruled that similar wearing apparel exemptions include a watch. So it’s possible that a New Hampshire court would rule similarly, and allow you to exempt a watch or other jewelry item as “wearing apparel.” Cutting against that possibility, however, is a very old New Hampshire case in which the court ruled that a breast pin was not wearing apparel for purposes of exemptions. In re Towns v Pratt, 33 N.H. 345 (1856). Check with a local bankruptcy attorney to find out what courts do today.
Wildcard exemption. New Hampshire has two wildcard exemptions that you can use to exempt some or all of your jewelry. N.H. Rev. Stat. Ann. §511:2(XVIII).
- up to $1,000 in any type of property, and
- the unused portion, up to $7,000, of the following exemptions: bibles and book ($800), food and fule ($400), furniture ($3,500), jewelry ($500), motor vehicle ($4,000), and tools of the trade ($5,000).
(To learn more, see The New Hampshire Wildcard Exemption.)
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 New Hampshire 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.