What happens to my assets when I file for bankruptcy?

When you file for bankruptcy, your assets may be affected depending on the type of bankruptcy you choose, either Chapter 7 or Chapter 13. In Chapter 7 bankruptcy, a trustee may sell nonexempt property to repay your debts. However, certain assets, such as necessary household items, pensions, and some equity in your home, may be exempt from liquidation. Under Chapter 13 bankruptcy, you can keep your assets while creating a repayment plan to gradually pay off your debts over a specified period. The plan is based on your disposable income, so you may be able to retain most of your assets. Understanding the specific bankruptcy regulations in your state can help determine how your assets will be handled during the process.