Exempt property are those items that cannot be seized by creditors (or by the bankruptcy trustee), even though you have filed for bankruptcy.
Each state has laws that determine which items of property you can keep, and in what amounts. For the state of California, the following assets may be exempted: Appliances, furnishings, clothing and food needed; tools of trade such as materials, instruments, uniforms, books, furnishings and equipment; health aids, and others.
Some other assets can be kept if their equity falls below certain limits. Equity is the difference between the value of the property and what is owed to the property. For example, a vehicle valued at $6,000 with a loan of $4,000 has an equity value of $2,000. This category includes homestead, vehicles, jewelry, family heirlooms and some types of trust funds and loans.
Although this introduction covers some of the basics, bankruptcy law is complicated. Since each person’s situation is unique, it is recommended that you contact a bankruptcy attorney before deciding whether filing for bankruptcy is indeed the right solution for your particular debts.
