 TITLE: What Is Chapter 7 Bankruptcy? CONTENT: What Do You Lose and What Can You Keep in Chapter 7 Bankruptcy?\n---------------------------------------------------------------\nIf you file for Chapter 7 bankruptcy, you may lose your nonexempt belongings, property that has a lien on it and property you offered as collateral for a loan.\nExamples of exempt property based on current federal limits for an individual include:\n*   A homestead exemption of $25,150\n*   Up to $4,000 on a vehicle\n*   Up to $1,700 in jewelry\n*   Up to $13,400 in personal property, such as books, household items, and clothes (there's a $625 per-item limit)\n*   Funds in tax-exempt retirement accounts, such as a 401(k) or 403(b) accounts, and up to $1,362,800 in combined savings in IRAs and Roth IRAs\n*   Public benefits, such as Social Security, veterans benefits and unemployment\n*   Up to $2,525 in books and tools of trade\n*   Alimony and child support\n*   Certain insurance benefits\n*   An additional $1,325 in property of your choice, plus up to $12,575 of unused funds from your homestead exemption\nDouble these amounts if you're married and file a joint tax return. Keep in mind that states may have different exemptions and limits that you can (or must) use when filing bankruptcy. For example, the homestead exemption for a single homeowner living in California starts at $75,000, but is unlimited in some other states.\nA trustee can't take property when its value is less than the exempt amount, which means you may be able to keep your home and vehicle.\nFor example, if your house is worth $400,000 and you still owe the lender $350,000, you have $50,000 worth of equity in the home. If your state has a homestead exemption higher than the $50,000 of equity you have, then the trustee can't take your home. But if your homestead exemption is $25,150, the trustee could take and sell your home, pay off your mortgage, give you the $25,150 exempt amount and use any remaining funds to repay other creditors.\nA similar scenario could play out with other forms of secured debts, such as an auto loan. However, just because the trustee can't take and sell these assets doesn't mean you'll get to keep them in the long run.\nWhen you're behind on your payments, your creditors can still foreclose on your home or repossess your vehicle once you complete the bankruptcy process. If you want to keep possessions that are securing your debts, you may have to continue making payments on the loan (if you're not already behind) or pay the full price to purchase the item. END