What Are the Wyoming Bankruptcy Exemptions?

What are the Wyoming bankruptcy exemptions and why are they important in a Chapter 7 bankruptcy? 

It’s important to know exactly what to expect from the Chapter 7 bankruptcy process before you file. That way, you can not only feel prepared, you can make the most out of seeking a fresh start. One thing you’ll need to anticipate when filing is the process of applying bankruptcy exemptions to your personal property. When you submit your forms to the bankruptcy court, the judge will assign a bankruptcy trustee to your case. That trustee will be empowered to sell any of your property that you haven’t exempted according to state bankruptcy law. To keep your trustee from selling your property to pay back your creditors, you need to carefully apply all of the state exemptions available (and applicable) to you.

Does Wyoming allow the use of federal bankruptcy exemptions?

Some states allow their residents to choose between claiming state exemptions and federal exemptions; Wyoming is not one of these states. As a result, you don’t have to worry about learning more about federal bankruptcy exemptions. While much of your case will be impacted by the federal Bankruptcy Code and federal law, this is one area where you’ll generally only need to pay attention to state law, with a few exceptions. The only exception to this rule comes into play if you’ve lived in Wyoming for less than two years. In this case, you may need to claim exemptions according to the federal Bankruptcy Code or the law of your previous state of residence.

Wyoming Bankruptcy Exemptions

All of the exemption value amounts listed below are granted to bankruptcy filers who are filing as “single” individuals. If you are married and are filing jointly with your spouse, please note that you are (unless otherwise noted) entitled to claim double the value amounts noted below. This so-called “doubling rule” effectively grants two complete “sets” of bankruptcy exemptions to each spouse. Note however that if only one of you legally owns a particular asset you’re hoping to exempt that you’ll need to apply the exemption allowance granted to a single filer. The doubling rule only comes into play when both spouses are joint owners of the specific piece of property or asset.

Real Property - the Wyoming Homestead Exemption

The notable exception to the doubling rule concerns real property. Married couples in Wyoming cannot double the value of the homestead exemption. All filers are entitled to exempt up to $20,000 of equity in their primary residence. Equity is, in this context, best understood as the financial investment you’ve made in paying down your mortgage. If a bank loans you $60,000 to purchase a home and you’ve already paid down $20,000 of your mortgage, that $20,000 represents your home equity. Wyoming’s homestead exemption isn’t particularly generous, which is partially why some homeowners opt to file for Chapter 13 bankruptcy if they have already heavily invested equity in their homestead.

Personal Property Exemptions

Wyoming has relatively generous personal property exemptions available, although you will need to do a little math as you’re calculating these values due to the ways in which they’re structured. Making a list of all the personal possessions each of the members of your family own (as well as general household possessions) before you begin might make this process more straightforward. Values for most personal property may roughly be calculated according to garage sale pricing, except where such pricing doesn’t make sense, such as when calculating motor vehicle equity.  Unless otherwise noted, the following personal property values may be exempted up to their full value:

• Ammunition (up to 1,000 rounds)

• Bibles and schoolbooks

• Burial plot

• Clothing

• Family pictures

• Firearms (up to 3)

• Motor vehicle equity (up to $5,000 in a single vehicle)

• Tools of the trade necessary for your trade or business (up to $4,000)

• Wedding rings (up to $2,000)

A single filer may also exempt up to $4,000 in bedding, food, furniture, and household articles of their choice. Unlike the homestead exemption, married couples may double this exemption.

Money Benefits

Wyoming is significantly more generous with its exemptions related to insurance coverage, public benefits, and monetary assets. Unless otherwise noted, the following assets may be exempted up to their full value:

• Annuity contract proceeds (up to $350 per month)

• Crime victims’ compensation

• Disability benefits (if the contract terms specify that they can’t be used to pay a beneficiary’s creditors)

• Earnings of National Guard members

• Firefighters’ death benefits

• Fraternal benefit society benefits

• General assistance

• Group life insurance or disability policy or proceeds, cash surrender and loan values, dividends, and waived premiums

• Life insurance policy (individual) proceeds, cash surrender and loan values, dividends, and waived premiums

• Life insurance proceeds held by the insurer (if the contract terms specify that they cannot be used to pay the beneficiary’s creditors)

• Liquor license and malt beverage permits

• Medical savings account contributions

• Pensions for criminal investigators, game and fish wardens, highway officers, police officers, and public employees

• Prepaid funeral contracts

• Retirement accounts – public or private - including IRAs, Roth IRAs, and SEP IRAs

• Tax-exempt retirement accounts, including 401(k)s, 403(b)s, profit-sharing, and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans, and IRAS and Roth IRAs to the current allowed amount under state and federal law

• Unemployment compensation

• Wages (the greater of either 75% of your disposable earnings or 30 times the federal minimum wage)

• Wages of inmates in either adult community corrections programs or correctional industries programs

• Wages of inmates on work release

• Workers’ compensation

Other Wyoming Exemptions

If you’ve been doing a lot of research about the bankruptcy court and the bankruptcy process in general, you may have come across the term “wildcard exemption.” Many other states allow their filers to exempt otherwise nonexempt property of their choice through a so-called wildcard exemption. Wyoming doesn’t have a wildcard exemption, so you’ll need to take particular care to exempt all the property you possibly can through the specific provisions and allowances noted above.

Filing Chapter 7 Bankruptcy? 

Filing bankruptcy can be an intimidating process. From claiming Wyoming bankruptcy exemptions to filling out forms listing all of your debts, Chapter 7 bankruptcy is a detail-oriented process. Thankfully, you don’t have to navigate either Chapter 7 or Chapter 13 bankruptcy alone. Most Wyoming law firms offer free consultations for potential bankruptcy clients. If you schedule a free consultation, you’ll be able to receive legal guidance from a bankruptcy attorney at no-cost. If you can’t afford to work with a bankruptcy lawyer beyond a free consultation, don’t panic. If you don’t make much income and you’re eligible to file for Chapter 7 bankruptcy, Upsolve may be able to help you file your bankruptcy forms for free. Don’t let the costs traditionally associated with filing for bankruptcy stop you from seeking debt relief. Most of the time, there are ways to mitigate this burden, especially if you don’t earn much income to begin with.