Bill description: HB 464 increases the value of property that is exempted from being used to settle outstanding debts in the case of bankruptcy.
Does it violate the spirit or the letter of either the U.S. Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the U.S. Constitution or the Idaho Constitution?
When an individual declares bankruptcy, it is generally because one's debts exceed one's assets, thus making it mathematically unlikely if not impossible to satisfy those debts. When bankruptcy is declared, one's assets are typically used to satisfy some part of the outstanding debt. Idaho law contains numerous exemptions of personal property, however, so that one can declare bankruptcy without sacrificing every asset to creditors. It should be understood that the exempted assets reduce what is available to satisfy the outstanding debts.
HB 464 increases these exemptions — in some cases substantially — as follows:
At issue here are the property rights of an unpaid creditor. Bankruptcy is supposed to be a last resort when repayment of debt is impossible, but HB 464 proposes to exempt more than $214,000 worth of a debtor's assets while leaving a creditor with nothing. HB 464 lessons the value of creditors’ property rights and makes bankruptcy an easier and more comfortable solution for individuals who have taken on too much debt.