Most Personal Bankruptcy Cases Do Not Result in a Loss of Assets
Most people filing Chapter 7 or Chapter 13 Bankruptcy do not lose any assets. However, it will depend on what assets you own, and what Exemption Laws you use to protect those assets in your Bankruptcy Case.
When you file for Bankruptcy, you have to list all of your assets on your petition. It is the Bankruptcy Trustee’s job to take those assets unless you can protect them with certain laws called “Exemption Laws.” Luckily, the exemption laws usually protect all of a person’s assets. 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 or Federal?
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 or Federal – 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 lawyer, because sometimes you have to use exemptions from a state you lived in previously.
You Should Always File with a Lawyer
WARNING: Using the wrong 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.