Jewelry When Filing Bankruptcy

Most people naturally assume that jewelry would be a type  of asset that you are not allowed to keep when filing for bankruptcy protection, particularly if you have a large amount of jewelry or if you own items that are worth a substantial sum of money.  But contrary to what most people think, jewelry is actually one type of asset that of which you are able to keep a large amount when you file if you live in San Diego.   In most cases, you can keep more jewelry than cars, trucks, or other vehicles.  If you live in another state, this may not (and frequently will not0 be the case.  This article is limited to a discussion of the jewelry exemption under California law.


For San Diego bankruptcy filers, in order to determine what property you can keep you must select from a set of exemptions, either the California set or the Federal set (more precisely, California’s set of federal-like exemptions.)  For 2023, the California exemptions allow you to keep $9,525 worth of jewelry.  This amount is expected to remain the same for the 2024 calendar year and is set to be updated April 2025.  The Federal exemptions provide for a $1,900 jewelry exemption plus you can apply the much larger wildcard exemption to protect jewelry.


So this means that when your case is filed with the Court you can (and should) fully disclose all of your jewelry.  Even if you have a diamond ring and necklace worth $8,500, there is no problem with keeping these possessions.  Using the Federal exemption, you could protect an even larger amount of jewelry.  In fact, both the trustee assigned to your case and the Court will have no problem with that these items of high value, even though you are eliminating a substantial amount of debt.  This is counterintuitive for many people, especially considering that the vehicle exemption for cars and trucks is an amount substantially less.  The fact is: the law lets you keep more jewelry than vehicles when you file for bankruptcy.


Bankruptcy law is not designed to be emotionally devastating to families.  It is designed to give families in financial distress a fresh start.  The reality is, most jewelry, heirlooms, or works of art that people possess have some degree of sentimental value.  So in order to make bankruptcy available to allow you to get out of debt San Diego and free yourself from financial stress, the law allows you to keep your valuable possessions.  You won’t have to give up your diamond pendant necklace handed down to you by your grandmother.  You won’t have to sell your engagement ring or wedding band.  You won’t have to give up your Rolex watch.  This all presumes that the total value of your jewelry, heirlooms, or works of art does not exceed the allowed exemption limit, which as mentioned above is quite generous.