Tool Loss and Bankruptcy - Can I Keep My Tools If I File Bankruptcy?


In general most tools that you own can be taken during a bankruptcy. However, if those tools are actually tools of the trade which are used to make a living you can keep some of them. In many cases you can keep all of them.

If the tools in question are used for work then in most cases you can keep those assuming their aggregate value is not more than $2,500. For example, if you are in the lawn business or perhaps a landscaping business and the tools are used by your business as a sole proprietor; then you should be able to keep the tools if they do not have a value of more than $2,500.

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In this example, you might own a tiller, tractor, or lawn mower for instance. In that case if the value is less than the previously stated aggregate value then you can usually keep the tools. If you use a computer or computer system to earn a living it would be exempt in this example.

Perhaps you are in the construction business and you own power tools, saws, hammers, etc. they would be exempt if the value is less than 2,500. We can apply countless examples to this but the bottom line is the 2,500 value. Make sure when valuing the items in question that you use the lowest possible value as if you were getting them from a second hand type store.

I know you have heard this before but I want to be clear that the above is not meant to be legal advice in anyway. You need to consult with an attorney for a final answer on the subject as the answer might differ in your particular state.

The good news is that you can obtain a free consultation from almost any bankruptcy attorney in your area. Most every lawyer offers a free consult so you can get your questions answered and make sure you qualify. It also gives you a chance to see if you like the attorney.

Remember you are interviewing your lawyer and not the other way around. There are more bankruptcy attorneys than you can imagine that would love to take your case. Make sure you are comfortable with the lawyer you decide to move forward with as you will be spending a bit of time with them. I always advise getting a free consult from at least three different lawyers in the area as some know the laws much better than others.


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