Most people ask us, “Can I keep my property in bankruptcy?” We want to make sure you do not lose your property in bankruptcy. Most people who file Chapter 7 bankruptcy can keep their property in Bankruptcy. The basic idea is that non-exempt assets are sold by the trustee and the proceeds used to pay administration costs of the bankruptcy and the balance paid to creditors. Therefore, determining whether your assets are exempt is critically important.
Generally you may elect Federal or Washington State exemptions but you cannot combine the two. It’s all of one or the other. If you have not lived in Washington continuously for the past two years you may have to use the exemptions of the state you lived in previously, but that issue is little bit complicated.
In the vast majority of Chapter 7 cases, debtors lose no property to creditors, even though most if not not all debts are discharged. This is why Chapter 7 is usually preferred over Chapter 13.