South Dakota Bankruptcy Exemptions: What Property Can You Keep?

The fear of losing everything is one of the most common reasons that people who could be helped by bankruptcy may avoid it. While it is true that some of your property may have to be sold in order to satisfy your debts, the law allows you to exempt, or protect, many of your assets.

Bankruptcy law is a system of federal laws. However, every state has its own set of property exemptions, and in South Dakota a debtor in a Chapter 7 bankruptcy must use the state’s list of allowable exemptions when deciding which property to protect.

These are among the most common exemptions claimed in South Dakota Chapter 7 filings:

  • Homestead — The equity in your home is protected if the property is under one acre in a town or 160 acres elsewhere. This covers mobile homes bigger than 240 square feet if they were registered with the state at least six months before filing bankruptcy. You can exempt up to $30,000 of the proceeds from selling your home for up to a year (that amount increases to $170,000 if you are a widow(er) or over 70 years old and not married). Spouses cannot double a homestead exemption, but the spouse or child of a deceased homeowner can claim this exemption.
  • Insurance — You can exempt life insurance proceeds up to $10,000 if the beneficiary is a surviving spouse or child; health benefits up to $20,000; annuity proceeds up to $250 a month; proceeds or cash value of a life insurance policy up to $20,000; and any life insurance proceeds where the contract specifically says the proceeds can’t be used to pay creditors.
  • Personal property — Exempted are clothing, food and fuel to last one year as well as books, pictures, burial plots and prescribed health aids. The head of a family may also claim $4,000 worth of personal property or specifically choose from several dozen items such as farm animals, machinery, furniture and other assorted property.
  • Wages — If you have a family, you can exempt wages earned in the 60 days prior to filing bankruptcy.

What if some of your property, like a car, isn’t specifically exempted? You may still be able to keep it by using the wildcard exemption. This allows you to choose other property to exempt, such as cars, televisions, jewelry, tools, and so on, until the value of the items reaches either $5,000 for non-heads of households or $7,000 for heads of households. An experienced bankruptcy attorney can guide you through the process to help protect the property that matters most to you.

Anker Law Group in Rapid City represents South Dakotans who seek debt relief through bankruptcy. To discuss you financial situation with one of our experienced attorneys, schedule a free consultation by calling 605-519-5967 or contacting us online.

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