Filing for bankruptcy is never an easy decision. You have to consider everything that will change and exactly how bankruptcy will affect you. There are different types of bankruptcy that you can file for and each will determine what happens to you and your possessions after you have been declared bankrupt.
One thing that you may not have thought about is bankruptcy exemptions. There are certain things that you do get to keep even when you have been made bankrupt. So what exactly is exempt from bankruptcy?
The Things that you get to Keep
It all depends upon where you live as to what you get to keep. If you live within the United States then each state will have its own rules as to what exemptions from bankruptcy you are entitled to.
If you live in Texas for example then you get to keep up to 10 acres of homestead within a city or 100 acres elsewhere. If you have a family then the limit is increased to 200 acres. However, if you live in South Dakota then you can only be exempt up to one acre in a town or 160 acres anywhere else. So there are different rules depending upon where you live. Some states will not work pout the exemption in acres, they will go by how much your home is worth.
Generally no matter where you live you get to keep basic assets. The whole point of declaring yourself bankrupt is so that you can have a fresh start. In order to do that you will need some assets and the court recognizes that.
If you own a car then it will depend upon whether there is any equity in the car as to whether the lender will take it from you. If there is no equity then it is unlikely that the lender will take your car from you. However, if you have taken a car loan and you have fallen behind on those payments then unless you bring the payments up to date or arrange to pay in some way, the car could still be taken from you.
Generally if you file for Chapter 7 bankruptcy then you get to keep all of your assets. This is because you are making arrangements to pay the debt.
However, if you file for Chapter 13 bankruptcy then you will lose some of your assets.
Overall it will depend upon where you live as to what you will lose. However, you always get to keep basic assets and these are determined by the trustee who is assigned to your bankruptcy case.
