Ohio  |  Bankruptcy

All assets are includable in bankruptcy and even conditional gifts should be reported to the trustee. The shell game of taking things back and then giving them back again after a bankruptcy discharge always has the potential of blowing up in your face, maybe even landing someone in jail. So let's just assume that the engagement ring is her personal asset.

First of all, the exemption amount for jewelry is $1,350, not $400. You also have a $1,075 wildcard exemption. That would give you a total exemption of $2,425 to use against the ring. Second, the resale value of the ring is probably less than the $6,000 you paid for it. Third, there is no guarantee that the trustee will go after an engagement ring at all. Some just want to have it appraised before deciding whether it's worth pursuing. And finally, even if the trustee does insist that there is some value distributable to creditors, your fiancee can pony up the balance to keep the ring.

Hope that helps.