• Chapter 7 debtors may keep certain property.bedroom image by ann triling from Fotolia.com
  
  In a Chapter 7 bankruptcy case, a bankruptcy trustee sells the bankrupt debtor's property. The trustee uses the money made from selling the debtor's property to pay the debtor's creditors. After the creditors have been paid, the debtor receives a discharge of his debts. Not all property owned by the debtor can be sold. State and federal laws specify property that the debtor can keep in a Chapter 7 bankruptcy case.
  
  

Chapter 7

• The debtor can keep all exempt property. Chapter 7 bankruptcy gives the debtor a fresh start after his debts have been discharged. The debtor can only have a fresh start if he can keep property essential to living life as usual. The federal bankruptcy code and most state laws allow debtors to keep wages, pensions, public benefits, tools of the debtor's trade, insurance, alimony and child support. States differ on the amount of wages they will allow Chapter 7 debtors to keep. In Georgia, a debtor may exempt 40 times the state or federal hourly minimum wage or a minimum of 75 percent of earned but unpaid wages, whichever is greater. The judge can authorize a greater amount for low-income debtors. In Massachusetts, a debtor may only exempt earned but unpaid wages of up to $125 per week.
  
  

Personal Property

• Most states allow debtors to take a homestead exemption. In addition to keeping the home, mobile home or land on which the debtor lives, the debtor usually can keep items found within the home. The state of Kentucky allows debtors to keep clothing, furniture, jewelry and articles of adornment up to $3,000 total. Meanwhile, the state of Massachusetts allows debtors to keep furniture up to $3,000; necessary clothing; beds and bedding; a heating unit; books up to $200 total; cash for fuel, heat, water or electricity up to $75 per month; cash for food or food up to $300; and a sewing machine up to $200.
  
  

Motor Vehicles

• The federal bankruptcy code allows a debtor to exempt a motor vehicle up to a value of $3,225. If a debtor owns a vehicle, and his equity in that vehicle is less than $3,225, the debtor can keep that vehicle. If the debtor owns a vehicle, and his equity in that vehicle is more than $3,225, the debtor may have to surrender the vehicle to the bankruptcy trustee. If the debtor's equity in the vehicle is $10,000, the trustee can sell that vehicle. The trustee will sell the vehicle and give $3,225 back to the debtor to cover the exemption amount. If the debtor does not want to part with his vehicle, he can try to strike a deal with the trustee. If the debtor can come up with the amount of money the trustee would receive by selling the vehicle, the debtor can keep the vehicle by paying the trustee.