What Can I Keep After Bankruptcy?

Obtaining Debt Relief Without Losing Your Property

If you are considering filing Chapter 7 bankruptcy, you may be concerned that you will have to give up your home, car and other assets. You may picture yourself left with nothing. Thankfully, in the vast majority of cases, this is not what happens.

I’m Ivan Trahan, an experienced bankruptcy lawyer based in Temecula, California. I have helped thousands of clients through bankruptcy, and I understand the importance of preserving as much property as possible. Contact me today to schedule a free consultation.

Understanding California’s Bankruptcy Exemptions

The bankruptcy system allows each state to define what types of property are exempt from liquidation by the trustee in Chapter 7 bankruptcy. In California, the exemptions allow Chapter 7 filers to keep many types of property, including (as of Jan. 1, 2010):

Under one set of exemptions:

  • Up to $75,000 if you are single, $100,000 if your are married and $ 150,000 if you are over 65 years of age, of equity in a homestead (house, mobile home or boat)
  • Up to $1900 of equity in a vehicle
  • Up to $5000 worth of clothing and personal items or household goods
  • Up to $5000 worth of tools you use in your profession
  • Unlimited amounts of qualified retirement savings
  • Life insurance proceeds to the extent reasonably necessary for your support

Under a another set of exemptions:

  • Up to $21,000 in a homestead or if you do not have to exempt a homestead, for use with any item that exceeds the allowable limit
  • Up to $3,300 in any vehicle
  • Unlimited amounts of clothing, personal items and household goods
  • Jewelry in the amount of $1,350
  • Tools of trade $2,075
  • Cash value of life insurance policies $11,075
  • Personal injury awards $20,725

This is not a complete list. There are many specific bankruptcy exemptions, as well as additional exemption options available. Different provisions may apply depending on your age and marital status.

Taking Careful Action to Protect Your Assets

The end result of the bankruptcy exemptions is that — through detailed planning with the help of an experienced attorney — most people who are in enough trouble with debt to qualify for Chapter 7 bankruptcy in the first place are able to file without giving up any of their assets.

I can guide you through the process of sorting out your finances and your property so that you can protect it to the maximum extent allowable by law. Contact me to discuss what I can do to help you keep your property while obtaining debt relief in bankruptcy.