Can I keep my jewelry if I file for bankruptcy in North Dakota?

You can use the North Dakota wildcard exemptions, and possibly the wearing apparel exemption, to protect rings, watches, and other jewelry in a Chapter 7 bankruptcy.

North Dakota does not have a specific bankruptcy exemption for jewelry. However, if you file for Chapter 7 bankruptcy in North Dakota, you can use North Dakota’s wildcard exemptions to keep some or all of your rings, watches, and other jewelry. In addition, you may be able to exempt some items of jewelry under North Dakota’s wearing apparel exemption. If you file for Chapter 13 bankruptcy in North Dakota, you can keep all of your jewelry. Read on to get the details.

Keeping Jewelry in Chapter 13 Bankruptcy in North Dakota

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 North Dakota

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.

North Dakota Bankruptcy Exemptions

Not all of your property is up for grabs, however. North Dakota (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 North Dakota is not one of these states. If you file for bankruptcy in North Dakota, you must use the North Dakota bankruptcy exemptions.

Using the North Dakota Bankruptcy Exemptions to Keep Jewelry

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

Wearing apparel and clothing exemption. North Dakota allows you to exempt wearing apparel, up to $5,000, and all of your clothing. N.D. Cent. Code §28-22-02. Some bankruptcy courts have interpreted other states’ wearing apparel exemptions to cover items of jewelry, like a reasonably-priced watch. It’s possible you could exempt a watch or another item of jewelry in North Dakota under the wearing apparel and clothing exemption – check with a local bankruptcy attorney.

Wildcard exemptions. North Dakota has several wildcard exemptions which you can apply to personal property in bankruptcy. You can use some or all of these exemptions to protect jewelry.

  • If you are the head of your household, and do not use the crops and grain exemption (which allows you to keep the crops and grain you’ve raised on up to 160 acres), you can exempt up to $7,500 of any type of personal property.  N.D. Cent. Code §28-22-03.
  • If you are not the head of a household, and do not use the crops and grain exemption, you can exempt up to $3,750 of any type of personal property. N.D. Cent. Code §28-22-05.
  • If you don’t use the homestead exemption, you can exempt an additional $7,500 of any type of property. N.D. Cent. Code §28-22-03.1(1).

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 North Dakota 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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