What property is exempt if I file for chapter 7 bankruptcy?

Most people who end up filing for chapter 7 bankruptcy will keep all of their property. While technically many assets are non-exempt, they will not be sold of for one of two reasons. 1. They are valuable but too difficult to sell, or 2. the property is not worth enough to make it worth the trustees time.

Here are some common exempt and non-exempt types of property.

Property that is Non-Exempt

Property that can legally be liquidated in a chapter 7 bankruptcy include the following:

• Homes or real estate other than a primary residence
• Valuable collections of cards, postal stamps, coins, and other valuables
• Liquid accounts such as cash and other short-term investments
• Very Valuable Musical Instruments (Unless they are used for employment)
• Extra cars, trucks or other vehicles other than the primary mode of transport
• Some recreational vehicles such as boats, atv's and motor-homes (state laws vary)

Property that is Exempt

Property that will be protected from liquidation and kept by the petitioner includes:

• A Primary Car or Truck
• Equity in a Primary Residence
• Pensions, 401k, IRA and any other Retirement Accounts
• Clothing
• Household Items and Furnishings
• Household Appliances
• Most Jewelry
• Any Tools used for Work
• Any Unemployment Benefits, Disability Benefits, Social Security, Welfare or other State or Federal Benefits
• Lawsuit Awards

What About Keeping Certain Non-Exempt Assets

You do have several options for keeping property that is non-exempt. The two most common options are to reaffirm the debt if the property is financed, or to redeem the property by offering the creditor a lump sum of cash in exchange for the property.

For more information about bankruptcy and how to keep your property, talk to a bankruptcy lawyer about your case, they will be able to tell you how you can eliminate your debts while keeping as much of your property as possible.