Can I File Bankruptcy and Keep My Property?
The short answer is, probably. In both Chapter 7 Bankruptcy and Chapter 13 Bankruptcy, debtors get to protect certain property from the court. This property is referred to as exemptions. It is exempt from the bankruptcy process. The vast majority of property that most debtors have is covered by and exemption and are exempt from the bankruptcy. If property is exempt, the debtor keeps it.
Can I Keep My Home and Car in Bankruptcy
In the case of a home or a car, the exemptions cover a certain amount of equity in the home or car. Equity is the amount of money that would be left if you sold the car or home and paid the lien or mortgage. For example, if you have a car that is worth $10,000 and there is $8000 owed on the car, there is $2000 in equity. The same is true for a home. If the home is worth $150,000 and there is $100,000 owed, there is $50,000 equity in the home. In Prescott, Arizona, the exemptions cover up to $6000 in car equity and $150,000 in home equity. Both of the assets above would be covered by exemptions and exempt from the bankruptcy process. In either chapter, the debtor would be able to keep his home and car.
Can I Keep Other Property in Bankruptcy
There are similar exemptions that cover personal property as well. Household goods, retirement funds, furniture, clothing, appliances, and everything you need to carry on a normal life are all covered by exemptions.