Understanding Bankruptcy Exemptions in Guam
Professor’s Corner
By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).
When it comes to bankruptcy, each state or U.S. territory has specific bankruptcy exemptions that allow bankruptcy filers to protect certain assets when filing for bankruptcy. Some states have their exemptions or allow you to choose between federal and state exemptions. The Guam bankruptcy exemptions are based on the Federal Bankruptcy Code under 11 U.S.C. Section 522.
How Many Bankruptcies Were Filed in Guam?
Considering Guam’s relatively small size and population, the number of bankruptcy cases filed is minimal. For the year of 2024, 16 Chapter 7 bankruptcies were filed. Two Chapter 13s and one Chapter 11. Compare that to my district, the Southern District of Florida, which had 7,387 filings for Chapter 7 and 6,268 for Chapter 13.
The 730-Day Rule and the 180-Day Rule
To file for bankruptcy in Guam, like every district required under the Bankruptcy Code, the residency requirements must be satisfied. If not, then the exemptions of the state or district you previously resided in will be used instead.
There are two important dates to consider when determining if you can file for bankruptcy in Guam. The first one is known as the 730-day rule. This means you must have lived in Guam for at least 730 days to use the state exemptions. If you do not meet this residency requirement but have at least resided in Guam for 91 days, you would apply the exemptions from your previous state of residence. This is known as the 180-day rule.
This is crucial because whether you are moving to or from Guam, you need to evaluate which state or district offers better exemptions based on your specific situation. To learn more about exemptions under the Bankruptcy Code, see §522(b)(3)(A).)
Guam’s Homestead Exemption
If you meet the 2-year residency requirement, you will apply the Guam exemptions to your assets. Let’s start with the homestead exemption as an example.
The Guam homestead exemption is based on the exemptions of the Bankruptcy Code. The current homestead exemption is $31,575.00 pursuant to Section 522(d)(1). For married couples filing jointly, the exemption is doubled.
To receive the homestead exemption for your primary residence, you must have owned the home for a total of 1,215 days. See Section 522 of the Bankruptcy Code.
Applying The Guam Bankruptcy Exemptions
Per Realtor.com, Barrigada had a median listing price of $644,000, while Yigo was around $599,000. Suppose in Barrigada, the average mortgage balance is $600,000. Applying the homestead exemption means subtracting $31,575 from the equity ($44,000), leaving $12,425 that is not protected or nonexempt.
If it is a joint filing, then the exemption amount doubles to $63,150, meaning the exemption exceeds the equity. This means that the property would be fully exempt. That’s why sometimes it’s better to do a joint filing, even though it wasn’t planned originally.
Personal Property Exemptions
Guam’s exemptions also include personal property under the Bankruptcy Code. Household goods and furnishings are a combined limit of $16,850, with a maximum of $800 per item. When giving a value to personal property, it should be based on the “fair market value” or FMV. What does that mean? I like to describe the fair market value simply as “garage sale” value or what it can sell for on sites like Craigslist.com.
Motor Vehicle Exemption
You can protect up to $5,025 in equity for a vehicle under Section 522. To determine the value of your vehicle, you can use trusted sources such as Kelly’s Blue Book. If the appraisal seems high, consider taking your vehicle to a dealer for a written appraisal.
When applying the motor vehicle exemption, if there is nonexempt equity, in Chapter 7 cases, the maximum amount of time a trustee can extend payments on non-exempt assets is twelve months. However, bankruptcy trustees prefer a ten-month payment plan.
Note that Chapter 13 does offer what is known as a cramdown. The cramdown allows you to reduce the value of your vehicle to the fair market value. It could potentially save you thousands of dollars. Use the links below to learn more about the Chapter 13 cramdown.
The Tools of the Trade Exemption
Because Guam uses the federal bankruptcy exemptions, there is the additional tools of the trade exemption, which provides an additional $3,175 for a single filer and $6,350 for a joint filing. The tools of the trade exemption protects tools, equipment, or instruments necessary for your profession. See Section 522(d)(6).
The Federal Bankruptcy Wildcard Exemption
Under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), there is also an additional layer of protection with what is called the Wildcard exemption. Not all states have a wildcard exemption, but since Guam uses the federal bankruptcy exemptions, any state that also uses the federal exemptions or has the choice to can protect an additional $1,675 on any property you choose. This includes a maximum of $15,800 of any unused portion of the homestead exemption to protect other assets.
Subsection (d) (5) reads as follows: The debtor’s aggregate interest in any property, not to exceed in value $1,675 [originally “$800”, adjusted effective April 1, 2025]1 plus up to $15,800 [originally “$7,500”, adjusted effective April 1, 2025]1 of any unused amount of the exemption provided under paragraph (1) of this subsection.
Research! Research! Research!
As I go through each state, I have noticed errors every time. It’s common for law firms or attorney blogs to not be updated, including state websites, even popular websites like the Legal Information Institute by Cornell Law School. So, if you are filing bankruptcy without a lawyer, I suggest you triple and quadruple check the exemption amounts. The personal exemptions are a perfect example.
As of April 1, 2025, the exemption for (d)(5) increased from $11,790 to $15,800 as listed above. The Legal Information Institute still has the exemption at $7,500. Those are the figures from six years ago!
For information on the Guam Bankruptcy Court System, follow this link. Contact information for the trustees in each district can be found via this link.
Professor Hernandez is an attorney specializing in consumer finance and debt relief. He is the published author of Consumer Bankruptcy Law (Routledge Publishing) and teaches law and finance courses in both English and Spanish for an international university.
Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link. You can also listen to my podcast on Spotify.
You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.
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Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.
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