Most bankruptcy laws are set by the federal government. However, there are different components of these laws that are set by the states.
The biggest one that you need to be concerned about is your property exemptions. This is because your state determines the amount of each category of property that you’re allowed to keep.
However, this gets more complicated when a state has more than one set of rules, like California.
Some states don’t have their own rules and solely rely on the default federal laws.
All of these are primarily determined by where you live, how long you have lived there, and where you might have lived in the past. It can get complicated if you’re somebody who has moved around from state to state.
For example, in California, you’re allowed to keep an automobile that’s approximately $3,500. In another state, this figure could be higher or lower.
California also has better homestead exemption than most states. Therefore, you really have to consider which state you are allocated when you file for bankruptcy, depending on where you’ve been living over the last several years.
If the bankruptcy laws in that state don’t favor your situation, you might want to delay your bankruptcy or make some changes to your assets so that you’re able to keep more of them.