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Delaware Bankruptcy Laws
For those filing Chapter 7, both federal and state exemptions exist to allow clients to protect some of their property. In Delaware, only state exemptions are allowed, and there is a limit of $25,000 that a client may claim.The specific types of exemptions include:
Homestead |
Up to $50,000 |
Personal Property |
Clothing; jewelry; books; family heirlooms; burial plot; church pew; and up to $500 in other personal property; college investment accounts |
Wages |
85% of wages earned but unpaid |
Pensions |
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000/person; Kent County employees; police; volunteer firefighters; state employees |
Public Benefits |
Worker’s compensation; unemployment; general assistance; aid to the blind, aged, and disabled; crime victims’ compensation |
Tools of Trade |
Up to $75 of tools, implements, and fixtures in New Castle and Sussex Counties; up to $50 in Kent County |
Insurance |
Life insurance proceeds; health or disability benefits; group life insurance; annuities up to $350/month; fraternal benefits |
Once a debtor and their lawyer have determined the best course of action, the debtor must complete credit counseling before they can file their bankruptcy petition. Following that, several steps occur:
- A bankruptcy trustee is appointed to oversee the disbursement of funds or the formation of a repayment plan
- A 341 meeting is scheduled to inform the creditors of the plan and allow them to ask any questions they may have
- The bankruptcy proceeding is completed and the Chapter 7 client has a fresh start, while the Chapter 13 client is free to complete their repayment plan and fulfill their obligations
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