This is not legal advice. It is not true in every case.  You are not a client by reading this.

Have extra money that isn’t exempt in your bankruptcy? Here is a list of some of the things that you can spend it on that shouldn’t get flagged in your bankruptcy. There is a possibility, but it is low. As always, consult your attorney.

In real life, generally, the only things a Trustee is interested in are high-value items that can be easily sold, including cash,  tax refunds, inheritance, jewelry, high-value artwork, vehicles, real estate, money transfers,  gifts, and expensive things obtained within 90 days prior to filing bankruptcy. I have never seen a Trustee take a wedding ring or engagement ring.  Trustees can take anything you obtained in the 90 days prior to filing for bankruptcy. If a Trustee can’t pay someone to take it, clean it, fix it, store it, and sell it, pay off any lien holder, AND make a decent profit, they generally won’t want it. This is not an absolute rule.

1. Household Goods and Furniture

• Beds, tables, couches, dressers, appliances
• Exemption: Under NC rules, household goods up to $5,000 + $1,000 per dependent. This is the value they can sell for used, like at a garage sale.

2. Clothing

• Every day clothes are almost always exempt, but not luxury designer wear

3. Food and Daily Necessities

• Stocking up on food and hygiene items is okay and usually exempt

4. Car Repairs or Maintenance

• You can fix up your car before filing — keeping your car in working order is allowed

5. Medical and Dental Care

• Paying for check-ups, prescriptions, glasses, or procedures can be a good move

6. Attorney’s Fees for Bankruptcy

• Perfectly legal — paying your bankruptcy lawyer is always exempt
• If you are doing a Chapter 13, you may want to pay more of the attorney’s fee upfront. This may be advantageous, but may not; consult your attorney.

7. Rent, Utilities, Insurance Premiums

• Prepaying rent/mortgage or utilities is allowed, especially if you’re about to file and want to stay current. Do not pay rent or mortgage more than one month in advance to be safe.

8. Funeral Plots and Burial Plans

• If you don’t own a home, you can have up to $35,000/person for this. Ask your attorney.

9. IRA or 401(k) Contributions

• Retirement accounts like IRAs and 401(k)s are protected under most bankruptcy rules
• Be careful: recent contributions could be scrutinized, especially large ones

10. Education Expenses

• Tuition, books, or supplies for your kids or yourself may be seen as reasonable

11. Life Insurance (Term, Not Whole)

• Term life policies with no cash value are usually exempt