“What Assets Can I Keep in a Chapter 7?”
In Chapter 7 bankruptcy cases, clients can typically keep all of their assets. However, if you have more equity in an asset than what is allowed*, the Chapter 7 trustee can take the asset and sell it to get funds for distribution to the creditors. In such cases, you might want to file for Chapter 13 case instead. This is because in a Chapter 13 bankruptcy case, the trustee cannot take any of your assets.
*In Chapter 7 a client may have as much as $15,000.00 in equity, or, the value of the house may be as high as $15,000.00 more than the total of mortgage loans owed against the property in order for the client to retain the house. As to motor vehicles, a client may have up to $3,000.00 in equity in the vehicle. A client may keep up to $3,000.00 in household goods, furnishings, and clothing in a Chapter 7 bankruptcy. A wedding ring with no more than $1500 in value may be kept and also up to $500 in other jewelry may be kept. A client may keep up to $3000 in tools which are used in the client’s primary business. Up to $150,000 in whole life insurance policy may be retained. Many of these values double if a married couple files jointly. A mobile home, which is on real estate not owned by the client may be kept if there isn’t more than $10,000 of equity. Typically, a client may keep all the value of a qualified retirement plan such as a 401k regardless of how much is in the retirement plan.
