Whether you can keep most of your assets in a bankruptcy depends on the type of bankruptcy you file (Chapter 7 or Chapter 13) and the exemptions available in your state.
1. Chapter 7 Bankruptcy:
Known as "liquidation" bankruptcy, non-exempt assets are sold to pay off creditors.
Certain assets are exempt, meaning you can keep them. Exemptions vary by state but commonly include:
Non-exempt assets, like valuable collections, second homes, or luxury items, may be sold by the trustee.
2. Chapter 13 Bankruptcy:
Known as "reorganization" bankruptcy, you create a repayment plan to pay off your debts over 3 to 5 years.
You typically get to keep all your property, but you must pay your creditors an amount equal to the value of your non-exempt assets.
Each state has its own set of exemptions, and some allow you to choose between federal and state exemptions. Consulting a bankruptcy attorney can help you understand the specific exemptions and how they apply to your situation. (800) 419-8950
1. Chapter 7 Bankruptcy:
Known as "liquidation" bankruptcy, non-exempt assets are sold to pay off creditors.
Certain assets are exempt, meaning you can keep them. Exemptions vary by state but commonly include:
- A certain amount of home equity (homestead exemption)
- Personal property (clothing, household items, etc.)
- Retirement accounts (401(k), IRA)
- Tools of your trade
- A vehicle up to a certain value
Non-exempt assets, like valuable collections, second homes, or luxury items, may be sold by the trustee.
2. Chapter 13 Bankruptcy:
Known as "reorganization" bankruptcy, you create a repayment plan to pay off your debts over 3 to 5 years.
You typically get to keep all your property, but you must pay your creditors an amount equal to the value of your non-exempt assets.
Each state has its own set of exemptions, and some allow you to choose between federal and state exemptions. Consulting a bankruptcy attorney can help you understand the specific exemptions and how they apply to your situation. (800) 419-8950
