Question 1

How does bankruptcy work in my state?

Accepted Answer

While bankruptcy is federal law, each state sets its own exemptions that determine what property you can keep. Some states also allow you to choose between state and federal exemptions. Your state's median income determines Chapter 7 eligibility through the means test.

Question 2

What are my state's bankruptcy exemptions?

Accepted Answer

Every state has its own set of exemptions covering your home, car, personal property, and retirement accounts. Some states are very generous with homestead exemptions, while others offer minimal protection. Check your specific state's exemption amounts before filing.

Question 3

Do I have to file bankruptcy in the state where I live?

Accepted Answer

You file in the federal district where you have lived for the greater portion of the last 180 days. If you recently moved, you may need to use your previous state's exemptions for up to two years after the move under the hanging paragraph rule.

Question 4

Does my state allow federal bankruptcy exemptions?

Accepted Answer

About 17 states allow debtors to choose between state and federal exemptions. The remaining states require you to use state exemptions only. If you have the choice, compare both sets to determine which protects more of your property.

Question 5

What should I know before filing bankruptcy?

Accepted Answer

Bankruptcy is a legal process that can eliminate or restructure debts, but it has lasting effects on your credit and financial life. Before filing, understand which debts can be discharged, what property you can keep through exemptions, and which chapter fits your situation.