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Deciding between System 1 and System 2 exemptions in Calif. for chapter 7


BlackMetallic
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My understanding is that System1 set of exemptions is really good in protecting the home equity (it protects up to $75,000), but it doesn't do that good of a job of protecting my car and personal property (i.e. no wildcard exemption, no $650 dollars per each item allowed, etc.). System 2 seems like it will let me protect pretty much all of my personal property (especially with that new generous $4,800 vehicle exemption), but the homestead exemption for the system 2 is only around 23K if I am not mistaken, which may be a risky deal, considering how much the house prices have been going up in Calif. (my house goes up by $7,500 every month). If I were to file for Chap 7 around the end of August, what month's house price would the Trustee take into consideration? Would he look at the house price when I filed, or when he reviewed the case some x months later? My understanding is that the whole Chap 7 process lasts 4-5 months in Calif. (correct me if I am wrong), so when in this period does the trustee decide whether to sell the house or not?

 

Right now, I have around $2,000 of equity in the house, but am a little worried about this housing bubble pushing my house value beyond what I am able to exempt in a very short time. We here in Calif. have a lot of large financial companies and hedge funds buying houses in bulk and converting them into rentals. This has raised the house prices tremendously.

 

But then, if I go with System 1, can I pretty much kiss my music recording equipment bye-bye? I am a hobbyist musician and have around $840 in musical instruments, mixers, microphones, etc. It's not much, but it'd be hard to lose. System 2 seems like it would let me keep all that, but System 1 has some "average household" standards that are basically at the Bankruptcy Court's discretion. Since the average household doesn't have mixers and mics and keyboards, do I stand to lose all that stuff? Or how about having 2 computers and a laptop? Do I get to keep just 1 computer under System 1 exemptions?

 

Please advise.

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Most bk lawyers will give a free or lowcost initial consultation. Speak with a few and see what they suggest.

At the end of the day, nobody wants used electronic or personal property. Think gargage sale or pawn shop values. You shouldn't be at risk of losing anything along those lines.

If you have a routine run of the mill bk, you'll likely have your 341 meeting within 30 days of filing. Creditors have 60 days from that date to file any sort of adverserial proceeding {rarely happens}. After that, you should be discharged and closed.

Your lawyer will tell you how trustees in your district value your home.

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