Question: How much property does the debtor have to give up in a bankruptcy proceeding?
Answer: Items that the debtor usually has to give up include:
- Expensive musical instruments, unless the debtor is a professional musician;
- Collections of stamps, coins, and other valuable items;
- Family heirlooms;
- Cash, bank accounts, stocks, bonds, and other investments;
- A second car or truck; and
- A second or vacation home.
Certain types of property are exempt, however, which means that the debtor can keep them. Exempt property can include:
- Motor vehicles, up to a certain value;
- Reasonably necessary clothing;
- Reasonably necessary household goods and furnishings;
- Household appliances;
- Jewelry, up to a certain value;
- A portion of the equity in the debtor’s home;
- Tools of the debtor’s trade or profession, up to a certain value;
- A portion of unpaid but earned wages;
- Public benefits, including public assistance (welfare), Social Security, and unemployment compensation, accumulated in a bank account; and
- Damages awarded for personal injury.