The majority of homeowners and business owners have insurance. And just about every one of them believes they will never need to file a claim. Contrary to that thought process, though, people do file claims every day.

Read any newspaper or watch any television news broadcast and you’ll learn about floods, fires, tornadoes, hurricanes, earthquakes, lightning storms and burglaries that are occurring on any given day.

We have had to file a few claims and found it to be an extremely easy process. Most companies have 24-hour telephone service. Even easier (we prefer talking to our agent so he knows what’s happening), we called our agent, he gave us the number to call to get a claim number and within minutes we were talking to our adjuster.

The difficult part comes later, when you’re asked to list the items that were damaged or destroyed. Often people are shocked when they are asked to provide this information, stating that they thought they would get a check in the mail for the total amount of their insurance coverage. This isn’t feasible because the insurance company doesn’t know the real value of your loss until you provide the list of items to them. How would they know how much they owed you if you just had a few rooms destroyed? Was the room full of electronics and expensive furniture, or was it a dining room with just a table and chairs?

What makes it so difficult for you when you being to complete the claim form, is trying to remember what you owned. Consider you’ll need to list each item, room-by-room, or you won’t receive the funds to replace them. This is why so often you’ll hear that after a disaster, someone didn’t recover very well. If you state that you had 100 CDs, but actually had 200, you just lost around $1200 just because you didn’t know what you owned. Take that a step further to how many DVDs, pairs of shoes, items of clothing, etc., that you might underestimate.

Another difficult task is to provide proof of ownership. This is often required for high-end electronics, for example. Do you have a 52″ television or a 27″? If it’s the 52″, you will most likely need to prove it. The same goes for power tools. Were they top of the line, or a generic brand from a discount store? How about a surround system? What type of appliances did you own? There are many price ranges and the insurance company will most likely ask for proof if you’re claiming the more expensive brands and models.

Insurance adjusters have the responsibility to pay for what was covered under your policy, helping you get back to where you were. They need to verify there is no fraud involved, and an inventory completed prior to a disaster is a great tool for this. The photos provide proof, while the written report gives the details, including the serial numbers and model numbers so important to help prove ownership if the police recover your stolen items.

Create your personal property inventory for your home and/or business. Then, when the time comes for you to file your claim, you’ll be prepared and able to provide the proof to ensure a maximized claim

One of the first questions that most potential bankrupts have is, “What will happen to my property, if I file for bankruptcy?”

Because the bankruptcy process offers debtors a “fresh start” if they’re drowning in debt, to further the goal of a “fresh start” our Bankruptcy Code permits a bankrupt to keep basic possessions and assets going forward. The assets that a bankrupt can keep so that he or she can truly get a “fresh start” are considered exempt assets under the Bankruptcy Code. These exempt assets will not be subject to creditor claims or the claim of the bankruptcy trustee. Traditionally, the type and amount of exemptions varied from state to state. So exemptions depended on where you lived at the time of the bankruptcy filing.

Recent amendments to the Bankruptcy Code attempt to achieve more uniformity in exemptions by establishing a set of minimum federal exemptions. In those states which adopted this Bankruptcy Code amendment, if the federal exemptions are more generous than the state exemption, a debtor is allowed to elect exemptions under either federal or state law, but not both. Most states, however, opted out of this framework and require their citizens to claim exemptions based solely on state law. Whether under federal or state law, the exemption system permits debtors to retain the means of day- to- day living free from the claims of their creditors. As a result one of the first and foremost items considered exempt are used household goods, furnishings, clothes and personal effects.

A second item of exemption, are cars used for household purposes. Not all cars, mind you. That free and clear Rolls Royce, is not an exempt automobile. The federal exemption for a car is $3,225. This exempt amount refers only the equity in your car based on the car’s market value, less any loans against it. If your equity is more than $3,225, it’s possible that you could apply exemption amounts from other categories, such as the unused “wild card” exemption. Finally, if the equity in the car is more than the allowed exemption, it is possible to pay the trustee the amount above the exemption and keep the vehicle.

IRA’s and other forms of retirement savings are exempt. But can’t have $10 million in your IRA and go bankrupt. The 2005 amendments to the Bankruptcy Code set an exemption limit for IRA’s for all debtors, regardless of state of residence, to $1million. Pension rights and 401(k) plans, frequently the largest or second largest asset of most families are also safe from creditors and the trustee.

The homestead exemption is another oft used exemption, because it applies to property used as your residence. The federal homestead exemption for cases filed after April 1, 2010 is $21,625. State homestead exemptions vary widely. Before the passage of the Bankruptcy Act debtors would engage in bankruptcy planning to maximize this exemption. A debtor would move to a state with a generous homestead exemption and shield assets from creditors by buying an expensive home.

Current law in the state of California, for example, permits homestead exemptions from as little as $75.000.00 to as much as $175,500.00, where one of the debtors is age 65 or older or suffers from a physical or mental disability. Payment for pain and suffering, alimony, support, social security, victims reparations, life insurance, unemployment compensation, public assistance or veterans or death benefits are exempt to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

Recent amendments to the Bankruptcy Act provide that, every three years the federal exemptions are adjusted for inflation. The adjustments for 2010 apply to cases filed on or after April 1,2010. The federal bankruptcy exemptions are currently as follows: Homestead: $21,625, Vehicle: $3,450. Household Goods: $11,525 total with no single item exceeding $550, Jewelry: $1,450, Tools of the Trade: $2,175 and IRA: $1,171,650. There is also a federal “wild card” exemption of $1,450, plus any unused homestead exemption. In the event that you either do not own a home or have no equity in the home, the wild card exemption could be as much as $23,075.

Before reaching any conclusion on whether bankruptcy is the right answer to the mountain of debt that you are facing, talk to an experienced bankruptcy attorney in your area to determine which set of exemptions apply to you.

Mitchell Reed Sussman has been a real estate attorney and broker licensed in the state of California for the past thirty years. His firm specializes in real estate, foreclosure and bankruptcy litigation.