The UCC permits individual debtors (but not organizations) to keep some property for themselves. This exempt property saves the debtor from destitution during the bankruptcy process and provides the foundation for a new life once the process is over.
To complete this activity, first conduct an Internet search for your state's rules on exempt property; conduct a second search on one of your neighboring states. Next, write a paper in which you compare the two states by responding to the following:
- Is your state generous or stingy with exceptions compared to the other state you identified? Provide specifics.
- In considering a new bankruptcy statute, Congress struggled mightily over whether or not to permit state exemptions at all. What are the implications of exemptions varying by state? Why should someone in one state fare better than his or her neighbor across the state line?
- What rationale can you give for the differences between states?