Consumers that file bankruptcy are allowed by law to keep a certain amount of their property while going through the bankruptcy process.
Both the state and federal exemptions allow some property to be exempt no matter what the value is. Most states allow you to keep your furniture, clothing, and wedding rings. In Texas and Florida, homes are exempt and some property is exempt up to a certain monetary amount. Some of the equity in your home and car may be exempt from bankruptcy. Many states allow for a wildcard exemption allowing the filer to apply that amount to any property they choose.
Some of the property that will be exempt and not included in your bankruptcy estate:
- The property you acquire after you file bankruptcy
- Property used as collateral for a loan, like at a pawnshop
- Pensions, pension benefits
- The property you have in your possession that belongs to someone else
- Wages withheld for employer health benefits plans
Property that is not exempt and is subject to being seized by the trustee to be liquidated and distributed to your creditors are:
- Stamp or coin collections
- Cash, bank accounts, investments, stocks, and bonds
- A second home or a vacation home
- A second vehicle
If you have questions about what will happen to your property if you file bankruptcy, contact a Houston bankruptcy attorney to help you get financial relief while keeping most if not all of your property.