Will I lose all of my things?

One of the best things about Chapter 13 is that you can usually reduce your payments and still keep your property. For instance, let’s say you have a car that is worth $10,000.00. Your car note is $500.00 per month at 20% interest. We can always lower the interest rate down to at most 15%, and best of all, we can lower the monthly payment to $250.00. (This is just one example. No two cases are ever the same.) The same thing applies to furniture, appliances, electronics, and any other secured property, except for houses.

There are certain things that you get to keep, no matter what happens. We call these things "exemptions," because they are exempt from collection as long as you list them as part of your bankruptcy filing. An individual gets to keep up to $4,000.00 worth of property, and a married couple keeps $8,000.00. You also get to keep all of your clothes, suitcases, family bible, school books, any money that has already been paid into a pension plan or retirement account, as well as many other things.

As a practical matter, the only things that might be taken away from you are things that might be sold for enough money to cover the cost of selling them. For instance, nobody is going to bother with trying to sell your small appliances, your old VCR, your family photos, and most of your personal property. More than 90% of bankruptcy filers get to keep everything that they own. If you are in a Chapter 13, and if you are paying 100% to all creditors, then you will not lose anything unless you want to voluntarily give it back.

There are times when you will have no choice but to give certain things back to creditors, but if you can make certain payments over time you will always get to keep your property. If you are one of the rare people who has a lot of valuable property, such as stocks, bonds, antique furniture, artwork, cars, etc., and if you are filing Chapter 7, then yes, there is a good chance that you will lose some of your things.