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When you file for Chapter 7 bankruptcy, the court lets you keep your property up until a certain amount. One of the biggest misconceptions of bankruptcy is that you will lose everything you own. That’s not true. Most debtors who own less than $10,000 in property are able to keep all of it. If you’re filing for Chapter 7 bankruptcy and you do not have a home, you should feel comfortable knowing that most people in your situation are able to keep all of their property. In virtually all cases, the bankruptcy court is not trying to seize your clothes, furniture, etc.
If you own more than $10,000 in property, there is a chance you can keep it, or you may have to give it up. How much property you can keep depends on your state and exactly what you own. There are special laws that different states have, allowing you to keep different types and amount of property. These laws are called exemptions. For example, in Florida, most homeowners are allowed to keep their entire homes, regardless of how much their homes are worth. This is not the case in other states like New York.
It gets a bit more complicated if you have over $10,000 in property. If this applies to you, we urge you to consult a lawyer or do some research on whether the exemption laws in your state will allow you to keep everything you own.