• Motor vehicles, up to a certain value;



• Clothing, household goods, appliances, and home furnishings;



• Jewelry, up to a certain value;



• Tools of the debtor's trade or profession, up to a certain value;



• IRA's and Pensions;



• Social Security, Disability, Welfare, and Unemployment Compensation Benefits accumulated in a bank account not commingled with other monies; and



• The debtor's primary residence (so long as the equity satisfies the homestead exemption in your state).

The exemptions that are available vary from state to state and can make a huge difference in the amount of property the bankruptcy petitioner can retain. Although the bankruptcy laws are federal laws, this is the one area in which the bankruptcy laws are not the same in all states. The items bankruptcy filers most often must relinquish include:

• Expensive Musical Instruments, unless the debtor is a professional musician ("Tools Of His Trade");



• Valuable Collections (e.g., Coins, Dolls, Stamps)



• Family Heirlooms;



• Cash, stocks, bonds, and other investments;



• A second car or truck; and



• A second or vacation home.

Because the exemption amounts vary widely from state, the state exemptions are not available to recent state residents (individuals who have recently moved from one state to another). Under the new bankruptcy law, the bankruptcy filer must live in a state for at least two years before filing for bankruptcy to avail him or herself of that state's exemption laws. If the bankruptcy filer has only lived in the state for less than two years, the bankruptcy filer must use the exemptions available in the state where s/he used to live. For example, if you recently moved from California to Nevada and you have a fairly valuable car, you might want to wait to file for Chapter 7 because once you've been in Nevada for two years, you can claim its $15,000 exemption for motor vehicles. If you have to use California's exemptions, you can only keep a vehicle with less than $2,300 in equity.