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How Do Bankruptcy Exemptions Protect My Property?

Most people believe if they file for bankruptcy they will be able to keep their property without question. This is not entirely accurate and there are several steps that must be taken during your case if you want to hang on to your stuff. For instance, you are not allowed to keep your car or home if you do not continue to make the payments. One way to do this is to sign a reaffirmation agreement, which is essentially a new contract for the debt. In some instances you are permitted to continue making the payments voluntarily without having to reaffirm, but those instances are limited.

Another way to keep property in bankruptcy is to claim the property as exempt. Every state has a list of things that are exempt from a creditor’s reach, even in bankruptcy. But in order to take advantage of these exemptions you have to clearly state the legal authority for the exemption when you file your case. If you are not relying on the state exemptions, you can use the federal exemptions instead. Regardless of your choice, here are some common exemptions:

  • Your car, up to a certain value.
  • Your home, up to a certain value.
  • Personal items such as clothing and furniture.
  • A reasonable amount of jewelry, like a wedding band and watches.
  • Cash on hand.

If you improperly claim a piece of property as exempt, the bankruptcy Trustee does have the ability to seize the item. But if you use your exemptions properly, the Trustee will not be able to take your property and sell it for the benefit of your creditors. Sometimes it is tricky to figure out what is exempt and what is not, but with the help of a knowledgeable bankruptcy attorney the task is taken off your shoulders which means you can rest easy knowing your exemptions are proper. If you have more debt than you can pay and are worried about what you will get to keep if you file bankruptcy, call our office for answers.

For more information about bankruptcy, contact us at We will help by coming up with solutions that work for you.

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