Property and Exemptions in Bankruptcy

Get debt relief now. We've helped 205 clients find attorneys today.

There was a problem with the submission. Please refresh the page and try again
Full Name is required
Email is required
Please add a valid Email
Phone Number is required
Please enter a valid Phone Number
Zip Code is required
Please add a valid Zip Code
Description is required
By clicking "Find a Lawyer", you agree to the Martindale-Nolo Texting Terms. Martindale-Nolo and up to 5 participating attorneys may contact you on the number you provided for marketing purposes, discuss available services, etc. Messages may be sent using pre-recorded messages, auto-dialer or other automated technology. You are not required to provide consent as a condition of service. Attorneys have the option, but are not required, to send text messages to you. You will receive up to 2 messages per week from Martindale-Nolo. Frequency from attorney may vary. Message and data rates may apply. Your number will be held in accordance with our Privacy Policy.

You should not send any sensitive or confidential information through this site. Any information sent through this site does not create an attorney-client relationship and may not be treated as privileged or confidential. The lawyer or law firm you are contacting is not required to, and may choose not to, accept you as a client. The Internet is not necessarily secure and emails sent through this site could be intercepted or read by third parties.

Filers don’t lose everything in bankruptcy. But maintaining a lavish lifestyle won’t be on the table, either. Here’s what you can expect:

So how will you know what you can protect? Figuring it out is a multi-step process.

Start by learning about your state’s exemption laws—the laws that tell debtors what they can protect from creditors. Exemptions vary widely between states. For instance, exemptions in rural communities might protect farmland, livestock, feed, tractors, and other farming equipment. Other states might allow filers to exempt a sizeable amount of equity in a home or offer a significant wildcard exemption—an exemption you can use toward any property of your choice.

federal exemption set exists, too, so check whether your state gives residents the option to use the federal scheme instead of the state set. Then determine which exemption set will let you protect the most property (you must choose one and stick with it).

If you have nonexempt property—assets that you can’t protect with an exemption—find out what will happen to it. Typically, the Chapter 7 bankruptcy trustee sells nonexempt property and distributes the proceeds to creditors—but you might be able to repurchase the asset at a discount. The Chapter 13 trustee doesn’t sell property. Instead, you must pay an amount equal to the nonexempt value through your repayment plan. If you can’t afford the required payment, consider selling it yourself or returning it to the lender.

If you’re still paying for property you’d like to keep, and it’s serving as collateral for the debt—which is typical when purchasing a house, car, jewelry, furniture, or electronics—you’ll have other hurdles to meet. You’ll want to be current before filing for Chapter 7 and have enough income to make the regular payment and catch up on arrears in Chapter 13. Otherwise, the lender could seize the property.

Finally, you’ll want to learn about the ways to reduce the amount owed on the financed property, such as Chapter 7 redemption and reaffirmation options, and Chapter 13 cramdown and lien-stripping procedures.

The bottom line is that no one wants to lose valuable property, and reading the articles below is a good place to start. However, the laws can be complex, and an experienced bankruptcy lawyer will be in the best position to help you navigate the bankruptcy process.

Get Professional Help
Get debt relief now.
We've helped 205 clients find attorneys today.
There was a problem with the submission. Please refresh the page and try again
Full Name is required
Email is required
Please add a valid Email
Phone Number is required
Please enter a valid Phone Number
Zip Code is required
Please add a valid Zip Code
Description is required
By clicking "Find a Lawyer", you agree to the Martindale-Nolo Texting Terms. Martindale-Nolo and up to 5 participating attorneys may contact you on the number you provided for marketing purposes, discuss available services, etc. Messages may be sent using pre-recorded messages, auto-dialer or other automated technology. You are not required to provide consent as a condition of service. Attorneys have the option, but are not required, to send text messages to you. You will receive up to 2 messages per week from Martindale-Nolo. Frequency from attorney may vary. Message and data rates may apply. Your number will be held in accordance with our Privacy Policy.

You should not send any sensitive or confidential information through this site. Any information sent through this site does not create an attorney-client relationship and may not be treated as privileged or confidential. The lawyer or law firm you are contacting is not required to, and may choose not to, accept you as a client. The Internet is not necessarily secure and emails sent through this site could be intercepted or read by third parties.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you