What Property Can Be Owned After Declaring Bankruptcy?

Identify exempt property in a bankruptcy case.

There is certain property you are entitled to own following declaring bankruptcy. Before you file for bankruptcy you need to understand what property you are entitled to keep despite seeking protection in the bankruptcy court.

Exemptions

There are different exemptions that apply to property. These statutory (legal) exemptions permit you to keep certain items of property even after declaring bankruptcy.

Types

Types of exemptions include that for homestead (your residence), automobile, clothing, tools of the trade and home furnishings.

Reaffirmation Agreement

By keeping your residence and automobile, you remain obligated to pay off the balance of the loan due and owing. You accomplish this through a reaffirmation agreement--a contract with the lender that essentially is a loan modification.

Misconceptions

A common misconception associated with bankruptcy is that you end up stripped of all of your property.

Expert Insight

Bankruptcies are complex legal matters, particularly if you have property to protect. Therefore, consider hiring an attorney to represent you in pursuing a bankruptcy case.

References

• Cornell Law School: Bankruptcy Overview
• U.S. Bankruptcy Code
• "The Glannon Guide to Bankruptcy: Guide to Bankruptcy;" Nathalie Martin; 2006

Resources

• American Bar Association: Bankruptcy & Insolvency Litigation Committee