Will You Lose Assets?
Most People Do Not Lose Property in Bankruptcy
Most people filing Chapter 7 or Chapter 13 Bankruptcy do not lose any assets or property because of the exemption laws that protect them. However, it will depend on what assets you own, and what Exemption Laws you use to protect that property in your Bankruptcy Case.
Bankruptcy Exemptions
Exemption Laws Protect Your Property in Bankruptcy
When you file for Bankruptcy, you have to list all of your assets and property on your bankruptcy petition. It is the Bankruptcy Trustee’s job to take those assets unless you can protect your assets with certain laws called “Exemption Laws.” Luckily, the exemption laws usually protect all of a person’s assets and property. On Schedule C of your bankruptcy petition, you literally list each asset and which exemption law you are using to protect that asset. For example, if you have a home, you would list the home, and then list the Homestead Exemption law next to that home.
Which Exemptions to Use – State Exemptions or Federal Exemptions?
When you or your lawyer chooses which exemptions to use, you will either be using State Exemptions or Federal Exemptions. You may not use a mixture of both. Many states give you a choice of using either State Exemptions or Federal Exemptions – so you can pick whichever one is most advantageous to your particular situation. And then some states require you to use only that State’s exemptions (you do not have the choice to use the Federal Exemptions). If you have moved in the past few years, make sure you tell your bankruptcy lawyer, because sometimes you have to use exemptions from a state you lived in previously.
Use a Bankruptcy Attorney
WARNING: Using the wrong bankruptcy exemptions can have grave consequences and can cause you to lose assets. This is one of the main reasons this site recommends using an Experienced Bankruptcy Attorney to do your case, and not representing yourself. Remember... The person who represents himself has a fool for a client!