07.27.10

Leahy Introduces Bill To Protect Gun Owners In Bankruptcy

Legislation Would Provide Federal Exemption For Personal Firearms

WASHINGTON (Tuesday, July 27, 2010) – Senator Patrick Leahy (D-Vt.) introduced legislation Tuesday to provide an exemption in the Federal Bankruptcy code for personal firearms.  The Protecting Gun Owners in Bankruptcy Act will ensure that the right to bear arms is not compromised for Americans working to regain their economic well being through the bankruptcy process.

Under current federal law, there is no exemption to prevent creditors from seizing personal firearms from debtors.  In 2005, Congress defined “household goods” for the purposes of bankruptcy filings, but failed to include personal firearms in the definition.  The Protecting Gun Owners in Bankruptcy Act amends the Federal Bankruptcy code to provide an explicit federal exemption and amends the definition of “household goods” to include personal firearms with an individual or combined value up to $3000.

“Several states have enacted specific bankruptcy exemptions for firearms in their state laws,” said Leahy.  “The Federal exemption I propose would leave all of these state exemptions untouched and would only apply if a debtor affirmatively chose, where permitted, to use the Federal exemptions.  For many Americans, a personal firearm—whether a hunting rifle, a family heirloom, or a firearm for self-protection—is an important possession. Our bankruptcy policy is intended to help those in severe financial difficulty regain financial health and repay what they owe to their creditors to the extent possible.  And in encouraging and helping those in bankruptcy to make a new start we are right to do so in a way that allows room for the things that give our lives enjoyment and meaning.”

Every state has established exemptions for bankruptcy debtors, and the federal bankruptcy code allows each state to opt out of the federal exemptions. While many states have opted out of the federal exemptions, 16 states, including Vermont, allow debtors to choose between state and federal exemptions.  Very few of those states have explicit state exemptions for personal firearms and individual debtors may have other valid reasons to choose the federal exemptions.  The Protecting Gun Owners in Bankruptcy Act would provide an avenue for individuals in the bankruptcy process who live in states that provide a choice between federal and state exemptions to protect their personal firearms from creditors.

The House of Representatives is expected to vote as early as this week on companion legislation introduced by Congressman John Boccieri (D-Ohio).

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