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Bankruptcy (continues...)

What does it mean to go bankrupt?

When you go bankrupt (when you file for bankruptcy), all of your assets and debts come under the control of the bankruptcy court. It is important to understand that there are some assets that are called exempt assets in bankruptcy cases.

What are exempt assets from bankruptcies?

Examples of exempt assets from bankruptcies are:

• your clothing,
• food,
• books,
• personal belongings,
• furniture,
• some cash, and
• your wedding ring

These exempt assets from bankruptcies cannot be taken away from you. Other things such as your car and some real estate, especially your home, have additional protections. The law about what is considered exempt differs by state, but in general you are permitted to keep things you require for daily living.

What are non exempt assets from bankruptcies?

Your nonexempt assets from bankruptcies are those that the court can divide up among your creditors. These non exempt assets from bankruptcies include:

• investments,
• large amounts of cash, and
• valuable items you own.