Helping With Your Financial Future

Can you keep some of your possessions after filing for bankruptcy?

On Behalf of | May 15, 2024 | Bankruptcy Exemptions

The fear of losing everything — their home, car, and personal belongings — to their creditors is a common concern for those considering bankruptcy. It’s also not true. But this misconception keeps many in the Escondido area from seeking the relief they need.

The truth is, bankruptcy laws understand that you need a foundation to rebuild your financial independence upon. You may be surprised to learn that many of your possessions can be safeguarded during the process.

Bankruptcy and exemptions

Bankruptcy could require you to sell some of your possessions to settle your debts or afford a repayment plan, depending on whether you file for Chapter 7 or Chapter 13 bankruptcy. But the law carves out exemptions that can be a vital lifeline for those seeking a fresh start. These legal provisions ensure you don’t have to surrender all you own. Examples of assets typically exempt from bankruptcy include:

  • Your vehicle: Essential for getting to work and running errands.
  • Household goods: Furniture, appliances, and personal items that make your house a home.
  • Necessary work tools: Items you need to perform your job effectively.
  • Personal items: Clothing, wedding rings, and, in some cases, even your pets.
  • Specific benefits and accounts: Including veteran’s benefits, retirement accounts, and social security benefits.
  • Wages earned post-filing
  • Alimony and child support funds
  • Life insurance proceeds
  • Personal injury awards
  • Crime victim compensation

Like every state, California has its own rules for bankruptcy exemptions. Exactly what you can expect to keep depends on several factors. But knowing that exemptions to liquidation exist could encourage you to consider bankruptcy as an option for getting out of the debt cycle.

Take the next step

Bankruptcy doesn’t have to mean losing everything. With the right guidance, you can take full advantage of this financial reset while keeping the essentials that support you and your family. Contact a bankruptcy attorney in Escondido to explore your exemptions and start your journey to financial recovery with a solid foundation.