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Legal Helpers Tip: Depending on the jurisdiction where the bankruptcy petition is filed, your bankruptcy attorneys might help you keep certain assets, even in a Chapter 7 situation. However, state laws vary widely in the types of assets and amounts for each that are protected or “exempt.”
For instance, your Massachusetts counsel will advise you that you may be able to protect your home up to $500,000 in equity, while your Indiana bankruptcy lawyers will tell you that your residence only has equity protection up to $15,000. Your New Jersey bankruptcy lawyers will advise you that, unfortunately, your state's statutes contain no provision for a homestead exemption (though you might be able to claim the federal exemptions and protect some equity in your property). Should you have Phoenix bankruptcy lawyers, they will divulge that your homestead exemption may go to $150,000. If you choose not to use the homestead exemption in Arizona, you may claim a “personal property homestead” of up to one and one-half month's rent.
Regardless of your jurisdiction, you should be able to protect your contributions to qualified retirement plans, tax-deferred annuities, health insurance plans and deferred compensation plans. Your bankruptcy lawyers will also help you keep your contributions to an educational retirement account or qualified state tuition savings program, like a “529” fund.