by 
The Curious Bag
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Chapter 7 bankruptcy technically requires all assets to be sold to generate cash for creditors. However, states have enacted laws allowing people to keep certain assets outside of the bankruptcy.
Considerations
Decide what assets you want to keep and learn the type and value of assets described in the state statutes that apply to the bankruptcy petition.
Misconceptions
Avoid the erroneous belief that one loses everything during bankruptcy and has no ability to create credit. There should be enough exemptions in your state that you can utilize.
Typical Assets One Can Keep
Exemptions typically include your home, one or more cars, and some personal property (furniture, jewelry, clothing) up to state-stipulated dollar limits.
Effects
One must agree to pay outstanding loan balances on homes and cars to earn the exemptions. These debts cannot be discharged (eliminated) in the bankruptcy.
Warning
Never assume that home(s) and auto(s) are automatically protected. Check specific state regulations in the bankruptcy jurisdiction, as they can vary widely, with some offering more or less debtor protection.
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