Will a Kansas Bankruptcy Trustee Take My Wedding Ring From Me?
By Jill Michaux, Kansas Bankruptcy Attorney on Sep 19, 2007 in Bankruptcy Practice and Procedure, General Bankruptcy Information, Kansas
Kansas law allows you to keep $1000 worth of jewelry when you file bankruptcy.
The $1000 limit is based on liquidation sale value. It is not the retail purchase price nor the value listed on a jewelry store certificate. In other words, how much will a bankruptcy trustee get if he sells the ring?
In my experience, jewelry sells for slightly more than what a pawn shop would give you. The guideline I use is 20% of the price of a replacement ring from a retail jewelry store. Frankly, I believe that figure is on the high side of jewelry’s resale value.
For example, my client owned a four-carat, single-stone diamond ring she bought for $10,000 from a national chain retail jewelry store in the mall. I sent her to a local jewelry store that purchased jewelry (most stores don’t). They offered to buy her ring for $1800. She was sick about the fact that her ring was not worth the $10,000 she paid.
When she filed her bankruptcy, she exempted $1000 of the ring’s value. The trustee abandoned the $800 remaining value. We disclosed the $10,000 purchase price and the $1800 liquidation value on the bankruptcy paperwork. The trustee declined to get another appraisal and accepted the value, saying to me that he agreed with my 20% rule of thumb.
My client told the truth about her diamond ring in her bankruptcy proceeding and got to keep her ring. Most of my clients own jewelry worth far less and keep all of it without question.
See a post by Brett Weiss on jewelry that is collateral to secure the financing for its purchase.
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