The bankruptcy non-dischargeable debts
will give you an idea that only in certain cases these can be discharged. Assess
your situation and find out how many non-dischargeable debts you have. If the
number is low then a bankruptcy filing will
help you. There are still other factors that you must know about. These are stated
below.

Exempt Assets

A very common misconception exist about bankruptcy. It is about loosing everything a person owns. This is not true. Courts let a bankrupt person to keep several essential things. The exemption laws differ from state to state. Some items that may be exempt depending on the state you are in are as follows:

• Personal effects
• Furniture
• Cars (up to a certain amount of equity)
• Tools of a trade
• Equity m a residence (sometimes the entire residence)
• Clothes
• Household goods
• Books
• Jewelry

Many states offer homestead exemption too. In Texas alone, a person filing
bankruptcy can keep one acre of urban land and 100 acres
of rural land irrespective of how valuable the property is. Some people try to
get this favor by converting selling their non-exempt property into exempt property.
Such actions are considered against bankruptcy laws by the court.



This may happen too that when court grants you certain amount of equity exempt, the creditor will sell that asset to recover any excess equity. For example if you have a car of $5000, you owe $2500 on it, and the court gives you an exempt of $1200, then the creditor sells the car , gives you $1200 and keep the extra equity.