Reporting Assets

• Disclose everything and hide nothing when listing your assets in a bankruptcy case.financial report image by Christopher Hall from Fotolia.com
  
  Assets are reported on forms Schedule A - Real Property and Schedule B -- Personal Property. Real property refers to land and buildings; real estate. Personal property is everything else that you own, including cash, any type of money account, household goods, clothing, jewelry, furs, books, art, firearms, everything.
  
  In its article, "Filing Bankruptcy? Disclose Everything, Hide Nothing," the website NOLO advises, "Filing incomplete or inaccurate bankruptcy forms can lead to your case being dismissed--or worse, if the court thinks you omitted information or made false statements intentionally."
  
  

What Happens to Assets

• When you file your petition for bankruptcy protection, your case is assigned to a trustee who evaluates your documents, checks totals, assesses assets and makes a report as to whether you have anything that can be sold in order to pay your creditors. According to the website Legal Helpers, "The trustee is required by law to sell non-exempt assets and distribute money to creditors." If the trustee deems your assets saleable, you will be notified. You will be given an opportunity to buy back items that may have sentimental or other value to you.
  
  

Exemptions

• Because bankruptcy was conceived to provide filers with a "fresh start," the law includes a provision to protect certain property that can facilitate a fresh start and property of historical, familial or sentimental value.
  There are federal exemptions and, in some states, state exemptions. In states in which local exemptions are offered, a person filing for bankruptcy must choose between the use of state or federal exemptions; they cannot mix and match.
  
  

Exemptions Types

• Categories for which there are federal exemptions include real estate, tools of the trade, household, jewelry, vehicles, wrongful death funds, wages, alimony/child support, social security benefits, disability, unemployment benefits and life insurance proceeds. Exemption is provided "per item" and/or by "total value." For example, the household exemption is $425 per item with a total of $8,625. Check with your bankruptcy court for state exemptions. Check all exemptions when filing as exemptions change annually.
  
  

Saving Gifts From Creditors

• If you have filed, or are contemplating filing, for bankruptcy protection, you may have to surrender some personal property. Accept this fact and use the exemptions in a way that best helps you start over. To save as much personal property from sale as possible, compare the state and federal exemptions and choose the one that best suits your needs. Then, prioritize and use your exemptions wisely. You should be able to come out of bankruptcy with the possessions that are most important to you.