Certain property (or the equity therein) may be exempt from forced inclusion in a petition for bankruptcy. Federal laws specify some assets that may be protected. However, most states also have a list of real and personal property that may be exempt from forced liquidation. In most jurisdictions, the petitioner may choose which exemptions he/she wants to use (state or federal). Some examples of exempted property: qualified pension plans, unemployment compensation, some equity in your personal home (homestead), some equity in your automobiles, “tools of the trade” a debtor needs to work, social security, cash value of insurance policies, and often most personal property and household goods.

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