Claiming bankruptcy exemptions is straightforward for West Virginia residents because the state doesn’t allow filers to claim federal bankruptcy exemptions. A minority of states allow their residents to choose between applying state exemptions and federal exemptions to their property. However, because West Virginia is part of the majority, you’ll only need to worry about applying state-specific exemptions and federal nonbankruptcy exemptions to your assets. Take note however, that if you moved to West Virginia less than two years ago, you may need to deal with exempt property matters according to the law of your state of previous residence.
What are the West Virginia bankruptcy exemptions and why are they important in a Chapter 7 bankruptcy?
If you’ve heard the myth that filing for bankruptcy means that you’ll have to sell all of your personal property, it’s important to understand that this is misinformation. Yes, when you file your bankruptcy petition, the bankruptcy court will assign a bankruptcy trustee to your case. Yes, that trustee is allowed to sell your nonexempt property to pay back your creditors. However, if you pass the means test and are eligible to file for Chapter 7 bankruptcy, chances are that you don’t own much (if any) property that will be treated as nonexempt by the court. When you fill out your bankruptcy paperwork, you’ll be asked to claim exemptions under West Virginia law. Thesebankruptcy exemptions allow you to safeguard your property from being sold by your trustee. As long as you carefully apply all of the West Virginia bankruptcy exemptions that apply to your situation, very little (if any) of your property will be sold during your bankruptcy process.↑ Back to top
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Does West Virginia allow the use of federal bankruptcy exemptions?
Claiming bankruptcy exemptions is straightforward for West Virginia residents because the state doesn’t allow filers to claim federal bankruptcy exemptions. A minority of states allow their residents to choose between applying state exemptions and federal exemptions to their property. However, because West Virginia is part of the majority, you’ll only need to worry about applying state-specific exemptions and federal nonbankruptcy exemptions to your assets. Take note however, that if you moved to West Virginia less than two years ago, you may need to deal with exempt property matters according to the law of your state of previous residence.↑ Back to top
West Virginia Bankruptcy Exemptions
Take note that if you are married and you and your spouse are filing for bankruptcy jointly as a married couple that you’re entitled to benefit from the “doubling rule.” The doubling rule allows each spouse to claim a full set of exemptions thereby doubling the exemption values afforded to single filers. All of the values listed below are those that pertain to single filers. Make sure to take the doubling rule into consideration as you evaluate your exemption amounts. The only notable exception to this rule is that you’ll need to apply the single filer exemption value to any property that is only legally owned by you or your spouse alone.
Real Property - the West Virginia Homestead Exemption
West Virginia allows single filers to exempt $25,000 in home equity. Unlike many other states, West Virginia does allow married couples to double this exemption value to $50,000. Equity essentially reflects the investment you’ve made in paying down your mortgage. For example, if the bank loaned you $100,000 to purchase your home and you’ve paid $30,000 of that mortgage, that $30,000 is your home equity.
Note that if you are a licensed physician (per Articles 3 or 14 of the West Virginia Constitution), you filed for bankruptcy primarily due to medical malpractice debt, and you carry a minimum of $1 million in medical malpractice insurance, the homestead exemption value available to you is $250,000.
Personal Property Exemptions
In addition to home equity, West Virginia law allows Chapter 7 filers to safeguard certain kinds of personal property. Unlike most states, West Virginia places a cap on the value of every category of personal property subject to exemption. With that said, the value of most property is calculated according to “yard sale pricing” so available exemption values do tend to stretch. The following types of tangible property may be exempted up to the amounts listed:
Health aids (up to their full value, provided that they have been prescribed by a professional)
Jewelry (up to $1,000 – must be held primarily for personal or family use)
Motor vehicle equity in a single vehicle (up to $2,400)
Tools of the trade to be used in your profession or the profession of a dependent (up to $1,500)
Additionally, you may exempt the value of the following types of personal property (held for personal or family use), not to exceed $400 per item and not to exceed $8,000 in total:
Finally, Chapter 7 filers in West Virginia are entitled to exempt a variety of monetary assets, including public benefits, insurance proceeds, and retirement accounts. Unless otherwise noted, the value of the following fiscal assets may be exempted in full:
Alimony or spousal support (to the extent reasonably necessary for support)
Child support (to the extent reasonably necessary for support)
Crime victims’ compensation
Life insurance payments on accounts that insured the life of an individual whom the debtor was a dependent on the date of the individual's death (to the extent reasonably necessary for the support of the filer and any dependents of the filer)
Local public assistance benefitsLoss of future earnings awards (for the filer or an individual of whom the debtor was a dependent - to the extent reasonably necessary for support)
Personal injury awards for the filer or an individual of whom the debtor was a dependent (up to $15,000, not including pain and suffering compensation or awards for actual pecuniary loss)
Qualifying prepaid tuition trust fund or savings plan trust fund payments (including earnings)
Social Security benefits
Wrongful death awards for an individual of whom the debtor was a dependent (to the extent reasonably necessary for support)
Additionally, payments reasonably necessary for support may be exempted for annuities, pensions, profit sharing plans, stock bonuses, and contracts tied to age, death (including life insurance contracts), disability, illness, or length of service.
Finally, funds on deposit in an individual retirement account (IRA), including a simplified employee pension (SEP) may be exempted regardless of the amount of funds, subject to a few specialized conditions.
Other West Virginia Exemptions
Especially if you’re not a homeowner, you’ll want to take special note of the West Virginia wildcard exemption. This provision allows filers to exempt property of their choosing that can’t be exempted through use of a provision noted above. Every single filer is entitled to an additional $800 in value under this exemption, whereas married couples filing jointly are entitled to an additional $1,600 in value. However, West Virginia’s wildcard exemption also allows filers to treat any unused portion of the homestead exemption as “wildcard.” Meaning, if you either aren’t a homeowner or you didn’t need to use the full value of your homestead exemption to protect your home equity, you can use the remainder of that value to protect the property of your choice.
If after applying all of these exemptions to your assets, you determine that too much of your property remains vulnerable to the risk of sale by your trustee, you may want to take advantage of free credit counseling provided by an accredited, nonprofit credit counseling agency in your area. This no-cost service will allow you to better determine whether an alternative debt relief solution may be in your best interests.↑ Back to top
Filing Chapter 7 Bankruptcy?
If all of this information is a bit overwhelming, don’t panic. You don’t have to navigate the bankruptcy process alone. Whether you’re filing for Chapter 7 bankruptcy or determine that it’s a better idea to file for Chapter 13 bankruptcy, you can take advantage of a free consultation with a bankruptcy lawyer in your area. Scheduling a free consultation will allow you to ask any questions you may have about Chapter 7 bankruptcy, Chapter 13 bankruptcy, West Virginia exemptions, filing bankruptcy, and bankruptcy law in general. If you can’t afford legal advice from a bankruptcy attorney after your free consultation is complete, Upsolve can help. We offer free guides to filing bankruptcy on our website and many people are able to use our free web app to prepare for filing their Chapter 7 bankruptcy cases at no cost. If you’re looking to obtain a fresh start through the debt relief that bankruptcy provides, you don’t have to bear the burdens of this process alone.↑ Back to top