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Will I get to keep my property during my bankruptcy?

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In a Nutshell

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.

Written by Attorney Jonathan Petts.  
Updated July 22, 2020


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.



Written By:

Attorney Jonathan Petts

LinkedIn

Jonathan Petts has over 10 years of experience in bankruptcy and is co-founder and Board Chair of Upsolve. Attorney Petts has an LLM in Bankruptcy from St. John's University, clerked for two federal bankruptcy judges, and worked at two top New York City law firms specializing in... read more about Attorney Jonathan Petts

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