Tools of trade

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Tools of trade is a term generally used in bankruptcy law to determine what property a person would commonly use for the purpose of making a living, as items that are tools of trade are separately exempt from attachment with an additional amount above that normally given for a person's property.

Under bankruptcy law, the applicable exemption for tools of the trade is determined by state law and by the amount of time a person spent living in a particular state prior to filing. An attorney can help determine which assets are exempt and which exemptions are applicable.

For example, a person might be allowed an exemption for household goods, and could use an additional exemption for tools of trade. Anything the person can show is used by them for earning a living is carried under this separate exemption. Thus, a candlemaker would have to list a personal computer under household goods, but a computer programmer could be able to claim a computer as part of the tools of trade.