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What Property Can I Keep If I File for Chapter 7 Bankruptcy?


Many people in California mistakenly assume that they will have to give up all of their assets if they file for Chapter 7 bankruptcy. While Chapter 7 bankruptcy is a type of liquidation bankruptcy, it is critical for debtors to know that there are various types of property that are not liquidated in a Chapter 7 case. Only nonexempt property is liquidated in order to repay creditors, and in return, debtors can have eligible debts discharged and can get a fresh financial start. If you do want to file for Chapter 7 bankruptcy in Irvine or elsewhere in Orange County, what property can you keep? In order to understand the possible answers to that question, you will need to know more about California exemptions and how they might apply to your case. Our Irvine bankruptcy attorneys can explain in more detail.

California Has Two Sets of Exemptions 

Under California state law, there are two different sets of bankruptcy exemptions, and a debtor filing for Chapter 7 bankruptcy must choose which set they will use. The set of exemptions chosen will determine what property you can keep in your bankruptcy case. You should discuss which set of exemptions you will want to choose in your bankruptcy case, but the general types of exemptions in both sets include, for example, the following types of assets:

  • Primary residence;
  • Motor vehicle;
  • Household furnishings;
  • Jewelry;
  • Tools of the trade;
  • Retirement benefits;
  • Life insurance;
  • Death or cemetery plot; and
  • “Wildcard” exemption to retain personal property of the debtor’s choosing.

The amounts will vary depending on the set of exemptions you select.

Debtors Must Use California Exemptions 

While California, unlike some states, does not allow debtors to choose between federal and state bankruptcy exemptions, California does permit debtors who file for Chapter 7 bankruptcy to use federal non-bankruptcy exemptions in order to keep certain assets. These exemptions include but are not limited to:

  • Retirement benefits if you are a veteran, civil or foreign service employee, military employee, railroad employee, or recipient of Social Security benefits;
  • Certain death and disability benefits for government employees or longshore or harbor workers;
  • Survivors’ benefits for certain military or government employees; and
  • 75 percent of your wages, or 30 times the federal minimum hourly wage.

California Does Not Permit Spousal Doubling of Exemptions

 Some states allow a married couple filing for bankruptcy jointly to double exemption amounts, but California does not. Accordingly, when you are determining what assets you might expect to keep, you should not anticipate doubling any of the existing exemptions.

Contact a Chapter 7 Bankruptcy Lawyer 

If you want to learn more about filing for Chapter 7 bankruptcy in Southern California, or if you feel you are ready to file, a lawyer is here to help. After we speak with you and learn more about your particular financial circumstances, we can tell you more about exemptions that are likely to apply to your bankruptcy case and how you can retain property that is important to you in your Chapter 7 bankruptcy case. You should contact a Chapter 7 bankruptcy attorney at The Law Office of Charles A. May to discuss the details of your case and to get started on your filing.


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