When filing bankruptcy what can you keep?

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When filing for bankruptcy, one of the most common concerns individuals have is what they can keep. Bankruptcy is a legal process that allows individuals or businesses to eliminate or repay their debts under the protection of the court. However, it does not mean that everything you own will be taken away. There are certain exemptions and rules that determine what assets you can keep during bankruptcy. In this article, we will explore what you can keep when filing for bankruptcy and how these exemptions vary depending on the type of bankruptcy you file.

Chapter 7 Bankruptcy

What is Chapter 7 Bankruptcy? Chapter 7 bankruptcy, also known as liquidation bankruptcy, is the most common type of bankruptcy filed by individuals. In Chapter 7 bankruptcy, a trustee is appointed to sell non-exempt assets to repay creditors. However, there are exemptions that protect certain assets from being liquidated.

Exempt Assets in Chapter 7 Bankruptcy: The exemptions in Chapter 7 bankruptcy vary from state to state. However, some common exempt assets include:

1. Homestead Exemption: This exemption protects the equity in your primary residence up to a certain value. The value varies depending on the state you reside in.

2. Personal Property: Certain personal property such as clothing, furniture, appliances, and necessary household items are usually exempt up to a certain value.

3. Vehicle Exemption: You can usually keep a vehicle up to a certain value, which also varies by state.

4. Retirement Accounts: Most retirement accounts, such as 401(k)s, IRAs, and pensions, are typically protected in bankruptcy.

5. Public Benefits: Benefits such as Social Security, unemployment compensation, and disability benefits are generally exempt.

It’s important to note that these exemptions have limitations and specific criteria. Consulting with a bankruptcy attorney is crucial to understanding the exemptions applicable in your state.

Chapter 13 Bankruptcy

What is Chapter 13 Bankruptcy? Chapter 13 bankruptcy, also known as reorganization bankruptcy, allows individuals to create a repayment plan to pay off their debts over a period of three to five years. Unlike Chapter 7 bankruptcy, Chapter 13 does not involve liquidation of assets. Instead, individuals can keep their property and repay their debts through the repayment plan.

Retaining Assets in Chapter 13 Bankruptcy: In Chapter 13 bankruptcy, individuals can retain all of their assets, including non-exempt assets. However, the value of non-exempt assets plays a role in determining the repayment plan. The repayment plan must provide unsecured creditors with at least the value of the non-exempt assets over the repayment period.

It’s important to note that the repayment plan must be feasible and approved by the court. Working with a bankruptcy attorney is crucial to creating a realistic repayment plan that allows you to keep your assets while repaying your debts.


When filing for bankruptcy, it’s important to understand what assets you can keep. In Chapter 7 bankruptcy, exemptions protect certain assets from being liquidated, including your primary residence, personal property, vehicles, retirement accounts, and public benefits. In Chapter 13 bankruptcy, individuals can retain all of their assets, but the value of non-exempt assets affects the repayment plan. Consulting with a bankruptcy attorney is essential to navigate the complexities of bankruptcy and ensure you can keep the assets that are important to you while addressing your financial obligations.


– Nolo: www.nolo.com/legal-encyclopedia/chapter-7-bankruptcy-exemptions-what-can-i-keep.html
– United States Courts: www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics
– Investopedia: www.investopedia.com/terms/c/chapter13.asp