A chapter 7 is the type of bankruptcy people think of most often when considering bankruptcy. It is commonly referred to as a simple or liquidation bankruptcy, which means that you can lose any property you own over and above the amount the courts allow you to keep. The amount you are allowed to keep, or exempt varies from state to state. Generally the exemption amounts are either (1) any equity you have in your homestead property and $1,000.00 in personal property and $1,000.00 of equity in a motor vehicle; or (2) if you do not own a homestead property then you get the $1,000.00 of personal property, $1,000.00 of equity in a motor vehicle and an additional $4,000.00 to exempt any remaining personal property.

There are additional exemptions provided for retirement accounts and other specific types of property, but these are the general exemptions. Another thing to understand when looking to file a chapter 7 bankruptcy is that in order to file a chapter seven you must be under median income for the state where you live, or qualify through the means test. If you would like to discuss a chapter 7 bankruptcy or see if you qualify, please contact our office for a free bankruptcy consultation.