Can property be kept?

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Updated: 4/13/2007 3:35 pm
When an individual files a Chapter Seven bankruptcy petition, nearly all of his or her property is sold by a bankruptcy trustee, and the proceeds are distributed among creditors. Some property may be exempt from sale under either state or federal law, but it's nearly certain that some of your property will have to be liquidated. Keep in mind that bankruptcy doesn't automatically wipe out all your debts. There are certain debts that can't be discharged, and creditors may successfully object to discharging others. Each state has its own bankruptcy laws, and you must choose between the federal or state exemptions, unless your state requires you to use state exemptions. Some items ARE excluded from automatic sale, and if a debtor can, and does, choose to take the federal exemptions, there are specific dollar limits set for the various types of property you can keep. Some things you can keep include some personal items and clothing, tools of your trade, some household furnishings, and usually some equity in your house. For detailed information as to which property you can keep and which you might be forced to sell if you file for Chapter Seven liquidation, contact a bankruptcy attorney.

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