What Property Can I Keep in a Chapter 7 Bankruptcy?

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Although the basic concept of Chapter 7 bankruptcy involves liquidating assets to repay creditors, the law is not intended to leave individuals or businesses without any assets. This is why filers can exempt certain assets from liquidation. You have a choice of two exemption laws that can protect a significant portion of your property from liquidation in Chapter 7 bankruptcy. An experienced bankruptcy lawyer can help you determine if the preferred California exemptions, based on the type of property you own.

California law provides a list of exemptions that may apply best to your specific circumstances. Under section 704.010 – 704.210 of the Code of Civil Procedure, for example, you can exempt many types of property based on certain value limitations, such as:

  • Motor vehicles, including related income, such as proceeds from their sale
  • Household items and personal effects
  • Building materials for home improvements
  • Jewelry, heirlooms, and works of art
  • Health aids
  • Tools and other items used in a trade
  • Retirement plans

The list of exemptions and allowed values can and do change periodically, which is why it is important to count on an experienced bankruptcy attorney who has access to the most recent state and federal updates in the law. With a detailed, upfront analysis of current property, a knowledgeable lawyer can help ensure you lose less property than you might expect from a Chapter 7 bankruptcy filing.

Careful preparation and analysis is necessary to help you obtain the most favorable outcome from a Chapter 7 bankruptcy filing.

Topics:  Chapter 7, Consumer Bankruptcy

Published In: Bankruptcy Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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