When you file for bankruptcy in Vermont you have two different types of bankruptcy to choose from: Chapter 7 and Chapter 13. Chapter 7 will discharge any old debts you have giving you a clean slate and Chapter 13 will allow you to work with creditors so that you can pay off your debt within the next three to five years. When filing for Chapter 7 bankruptcy, your property will become subject to be taken by your creditors in order to pay off your debts. The good news is that most if not all of it will be off limits to them. This is due to exemptions. Each state has its own laws regarding what property may be declared as exempt.
When declaring bankruptcy in Vermont, you will be given numerous exemptions for proceeds from insurance and other insurance benefits. These insurance exemptions include: annuity contract benefits to $350 a month, disability benefits that supplement life insurance, disability or illness benefits, fraternal society benefits, group life or health benefits, health benefits up to $200 a month, life insurance proceeds if the beneficiary is not the insured, life insurance proceeds for the person you are dependent upon, and uninsured life insurance contracts other than credit.
The largest group of exemptions you will be given when declaring bankruptcy in Vermont are the personal property exemptions. These include but are certainly not limited to: appliances, furnishings, goods, clothing, books, crops, animals, and musical instruments to $2,500 total; jewelry to $2,500, unlimited weddings rings, motor vehicles to $2,500, bank deposits to $700, personal injury recoveries for the person you are dependent upon, stove, heater, refrigerator, freezer, water heater, sewing machines, health aids, and wrongful death recoveries. Also exempt are numerous farm animals and accessories.
As you can see, there are countless exemptions that you will be given when you declare bankruptcy in Vermont. This is why Chapter 7 bankruptcy cases are usually no-asset cases; this means that the person who declared bankruptcy didn’t have to give up any of his or her possessions. The following are some other exemptions that you will be afforded: homestead to $75,000, alimony, child support, various pensions, public benefits such as aid to the blind, tools of your trade to $5,000, earned but unpaid wages to 75 per cent, and many more. Together, you and your attorney can declare most if not all of your property.