Exemptions

• There are different exemptions that apply to property. These statutory (legal) exemptions permit you to keep certain items of property even after declaring bankruptcy.
  
  

Types

• Types of exemptions include that for homestead (your residence), automobile, clothing, tools of the trade and home furnishings.
  
  

Reaffirmation Agreement

• By keeping your residence and automobile, you remain obligated to pay off the balance of the loan due and owing. You accomplish this through a reaffirmation agreement--a contract with the lender that essentially is a loan modification.
  
  

Misconceptions

• A common misconception associated with bankruptcy is that you end up stripped of all of your property.
  
  

Expert Insight

• Bankruptcies are complex legal matters, particularly if you have property to protect. Therefore, consider hiring an attorney to represent you in pursuing a bankruptcy case.