Will I Lose My Jewelry in Bankruptcy?

Answer:  Probably not.

Schedule B in both Chapter 7 and Chapter 13 Bankruptcy lists all the assets you own.  It’s important to keep in  mind that the debtor is responsible for listing all assets.  Often, and understandably, debtors believe they are only to list the assets they believe to have value.  But this is not the case; all assets are to be listed.

“All Assets” includes everything you own, from the house and cars to the old yellow dog that may be loping around in the backyard.   All assets also includes your jewelry.  Jewelry of course includes everything from your wedding rings, to the “junk jewelry” in the spare bedroom drawer that seemingly may have no value.  Generally, your bankruptcy attorney will list these assets into two categories of jewelry: Wedding Rings and Costume Jewelry.  If there are other expensive pieces of jewelry that you own, those may be given special attention as well.

Exemptions in Bankruptcy Save Assets

Just because you have jewelry, maybe even “expensive” jewelry, you will not necessarily lose them if you file for bankruptcy relief.  The law allows you to save or protect certain amounts of assets through applicable “exemptions”.  For example, the “Exemption” amount in Missouri dedicated to equity on one’s residence is $15,000, meaning even if you have $15,000 of equity in your home, it is protected and is not subject to being taken by your creditors.

Bankruptcy Exemptions Applicable to Jewelry

Jewelry has two specific exemptions.  The first is dedicated to wedding rings.  The second is dedicated to “other jewelry”, commonly referred to as “costume jewelry”.  In St. Louis and in all of Missouri, wedding rings are protected as an asset in bankruptcy up to a value of $1500 per debtor.  Other jewelry is protected to the amount of $500.

So, what does this mean?  This means that if you have wedding rings worth a total current value of less than $3000 total per couple, they are protected through the applicable Missouri exemptions.  The same holds true with the rest of your jewelry, in that those items, taken at value, are protected up to a value of $500 per debtor.

I have Too Much Jewelry to File for Bankruptcy

Maybe not.  In some cases, your jewelry may be protected by the application of other exemptions that are not specific to your jewelry.  Depending on your specific case, and specific assets, the Wildcard, and the Head of Household exemptions may be applied to your jewelry.  These exemptions are discussed more thoroughly in another post, but generally, these are additional amounts of non-specific exemption protection that may be applied to any asset, in case the specific exemption dedicated to that asset does not fully protect it.  Here in St. Louis County, the proper use of these exemptions can make all the difference when sitting with the trustee at your 341 Meeting of the Creditors.

It is very important that you give your attorney your honest opinion of the value of all your property; even if you believe an item is worth more than the applicable exemption.  There are ways to protect your property, even jewelry.  However, your attorney can only protect what he or she knows exists.

Always consult with your bankruptcy attorney if you have questions.