Exemption Planning: Legal Ways to Protect Assets Before Filing
Exemption planning means arranging your affairs, before filing, so that lawful exemptions protect as much as possible — the bankruptcy equivalent of tax planning. Done openly with counsel, it's legitimate; done by hiding assets or transferring them to relatives, it can cost you the entire discharge.
What legitimate planning looks like
Using nonexempt cash to pay the mortgage down into a protected homestead, making allowed retirement contributions, buying necessary exempt property, and choosing the filing date around paydays and refunds are recognized planning tools when disclosed on the schedules.
Where the line is
Transferring the truck to a brother, 'selling' assets to family for a dollar, or moving money to hide it are fraudulent transfers — trustees can unwind them under 11 U.S.C. § 548 and state law, and intentional concealment is grounds to deny the discharge entirely under § 727.
Why the exemption choice itself is planning
Washington filers choose between state and federal exemption lists — a single decision that can swing thousands of dollars of protection depending on whether home equity or cash and vehicles dominate the picture. Arizona has opted out (A.R.S. § 33-1133(B)), so its state list applies, making category-by-category fit the planning work.
Exemption amounts and rule thresholds change on statutory schedules. See our monthly rule reports for the current figures with citations to the official sources.
Need help protecting what you've worked for?
Majors Law Group, P.C. — an independent bankruptcy firm running its practice on Bankruptcy.AI — handles Chapter 7 and Chapter 13 cases in Arizona and Washington.
Bankruptcy.AI is a technology platform, not a law firm, and does not provide legal advice. Majors Law Group, P.C. is a separate, independent law firm. This page is general information and is not legal advice; outcomes depend on your specific facts.