Will I lose my property if I file for bankruptcy?

Not necessarily. Debtors are given a number of exemptions to exempt their property from what is called the “bankruptcy estate.” A trustee is appointed to your case, and has the duty of administering the estate, liquidating non-exempt assets to pay down some or all of your debt. Some assets are always exempt, like tax exempt retirement accounts, though some exemptions have limited value. More often than not, debtors in chapter 7 bankruptcies are able to discharge most or all of their debt, and keep all of their property. This is called a “no-asset” case.

If a debtor has non-exempt property, he or she may file a chapter 13, and keep all of his or her property, so long as his or her creditors are paid at least what they would receive from the liquidation of non-exempt assets in a chapter 7, through the chapter 13 plan.

Please contact me if you have a specific question regarding exemptions.