If you are in the middle of a bankruptcy proceeding, it can seem as if you are losing everything, like they are taking away everything you ever had and worked so hard to get. So if you file as a business or as an individual, you are going to have your property taken from you and sold to pay off your creditors. You will feel as if you are losing a lot since they will take a lot from you.

How Will I start My Life Over?

You can however take comfort in the fact that you will have some property that is exempt for the bankruptcy proceedings. You will have things that you will retain and these items will not be seized in order to pay off your creditors. This stems from the fact that bankruptcy has a two-fold purpose. One is to pay off as much debt to your creditors as possible, and two is to help you get a fresh start in your life. In order to get a new life going you will need to have some things to continue working and living. To keep moving in your life certain properties you have will be exempt from being sold in order to satisfy your debts.

What About My Home

To get started in your life again you will find that some things will be negotiable during the bankruptcy hearings. If you owe a substantial amount on your home and there is little for a creditor to get if it were sold then you will retain your home. You will still need to make the payments, but it will stay with you. Unless you have a really nice car that will stay with you as you will need to have some way to get to work each day.

Can I Still Retire

If you have any retirement funds in a 401K or Company retirement plan those are also exempt from seizure. Creditors are not allowed to touch your retirement in any way. You will also find that unless you have been purchasing a lot of really expensive household items like jewelry multiple fancy televisions or high end stereo equipment you will keep most items in your home. Your wedding and engagement rings will be exempt also. In short if there is little resale value in the things that you own, those items should not be part of any settlement.

What's Next

Exempted items vary by state and municipality. As a general rule take a look at each item in your home and determine the resale value of that item, and how necessary it is in starting a new life for yourself. If the items can be sold for an amount that is less than what you owe, you will generally retain said item. Since you should already have an attorney to assist you in the bankruptcy process, ask about what items you can expect to be keeping and what types of things you will lose.


There are a lot of books you can read to help you before you decide that bankruptcy is right for you or not. If may be best for you to just negotiate a different payment structure with your creditors. There are even agencies that are able to assist in negotiating with your creditors if you feel uncomfortable doing that yourself. Talk it over with your family if you have one and see what the best move is for you to move forward with your lives together. Do not let this temporary problem destroy your family whatever you choose.