The Facts

• The Chapter 7 Bankruptcy Code allows a bankruptcy trustee to sell an individual's non-exempt assets in order to pay back his creditors. Non-exempt assets may vary in each state, but typically include vacation homes, valuable collections and any other assets that are not considered as necessary for daily living.
  
  

Exemptions

• The federal bankruptcy and homestead exemptions that are available in most states allow homeowners to protect their personal homes from being sold during the Chapter 7 bankruptcy process.
  
  

State Laws

• Individuals living in Texas, Minnesota and 14 other states are able to select between using federal or state exemptions when they file for Chapter 7 bankruptcy.
  
  

Chapter 13

• Debtors may consider filing for Chapter 13 bankruptcy instead of Chapter 7. Under the chapter 13 Bankruptcy Code, homeowners can avoid foreclosure by paying past due balances through a repayment plan.
  
  

Warning

• The applicable bankruptcy laws and debt repayment options vary for each person. Individuals should seek help from the Consumer Credit Counseling Service or an experienced attorney before filing for bankruptcy.