What Are the West Virginia Bankruptcy Exemptions?

Why Are West Virginia’s Bankruptcy Exemptions Important?

Bankruptcy exemptions are important because they help people protect their personal property and assets during a bankruptcy case. Exemption laws were passed to ensure that people who file bankruptcy can get a fresh start financially without starting over with nothing.

If you don’t claim exemptions, the bankruptcy trustee assigned to your case is allowed to sell your property and use the money earned to pay back your unsecured creditors. Though this is technically possible, it very rarely happens in Chapter 7 cases.

Can You Use Federal Bankruptcy Exemptions if You File in West Virginia?

No. Only a few states allow their residents to choose between the state’s bankruptcy exemptions and federal exemptions. Since West Virginia isn’t one of those states, you must use its state-specific exemptions if you’ve lived in the state for at least two years.

If you’ve lived in West Virginia for less than two years, you may be required to use a different set of exemptions when you file your case. To learn more read: Can I File For Bankruptcy After Moving To A New State?

What Are the West Virginia Bankruptcy Exemptions?

West Virginia’s bankruptcy exemptions cover three categories:

• Real property such as a home and the land it sits on

• Personal property such as your car or household goods

• Intangible property/assets such as retirement accounts and government assistance

The exemptions listed throughout this article are for single filers. If you’re married and you and your spouse are filing a joint bankruptcy petition, you can double the exemption amounts so long as you own the property together.

Real Property: The West Virginia Homestead Exemption

West Virginia allows single filers to exempt $35,000 in home equity. If you’re married, you can double this exemption value to $70,000 if you’re filing bankruptcy jointly with your spouse and you co-own the property.

Here’s how to calculate equity: Take the home’s current fair market value and subtract what you still owe on the mortgage. The result is your equity.

For example, if your home is worth $165,000 and you still owe $135,000 on it, you have $30,000 in equity and your home would be protected by the homestead exemption.

Note that if you are a licensed physician (per Article 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.

Source: W. Va. Code § 38-10-4(a)

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. 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 they have been prescribed by a professional

• Jewelry up to $1,000

• 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) for up to $400 per item and $8,000 in total:

• Animals

• Appliances

• Books

• Clothing

• Crops

• Household furnishings

• Household goods

• Musical instruments

Source: W. Va. Code § 38-10-4

West Virginia’s Motor Vehicle Exemption

Many Chapter 7 filers are worried about losing their car. The motor vehicle exemption can help protect the equity you have in a vehicle up to $7,500.

If you own the vehicle free and clear, your equity is equal to the car’s current fair market value as indicated on sites like Kelley Blue Book. If you’re financing the car, your equity is equal to the current fair market value of the vehicle minus what you still owe on the loan.

Source: W. Va. Code § 38-10-4(b)

West Virginia’s Wildcard Exemption

West Virginia’s wildcard exemption is $800 plus any unused portion of the $35,000 homestead exemption. You can use the wildcard exemption to protect any property that isn’t already protected by another exemption. You can also add the wildcard to an existing exemption to effectively increase the amount.

The same rule applies to married couples who are filing jointly.

Source: W. Va. Code § 38-10-4(e)

Money Benefit Exemptions

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 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

• Disability benefits

• Life insurance payments of accounts that insured the life of an individual on whom the debtor was  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 benefits

• Loss of future earnings awards for the filer or an individual on whom the debtor was dependent (to the extent reasonably necessary for support)

• Personal injury awards for the filer or an individual to whom the debtor was 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

• Unemployment compensation

• Veterans’ benefits

• Wrongful death awards for an individual to whom the debtor was 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.

Source: W. Va. Code §§ 38-10-4(j)(2), 38-10-4(j)(6), 38-10-4(j)(4), 38-10-4(j)(3), 38-10-4(j)(5), 38-10-4(j)(7), 38-10-4(j)(8), 38-10-4(l)(1), 38-10-4

Need Help Filing Chapter 7 Bankruptcy in West Virginia? 

If all of this information is a bit overwhelming, remember: You don’t have to navigate the bankruptcy process alone. If you have a simple Chapter 7 case, you can use Upsolve’s free filing tool to complete your bankruptcy paperwork. Upsolve has helped over 13,000 people get rid of over $700 million in debt. Our services are 100% free, and we’ve got great user reviews.

If you want some personalized advice before you file, you can also schedule a free consultation with a bankruptcy lawyer in your area.