Believe it or not, the answer to this is often “NO”. Most of your things are not items that would be taken away – under law, many of your possessions including clothing and furniture is yours to keep, or is generally low enough in value that your trustee wouldn’t even bother with trying to try to sell it to pay off your debt. The larger ticket items, however, may be taken. These include your vehicle and home if it has a certain amount of equity.
Under current Utah bankruptcy law, if your car has less than $3,000 of equity it cannot be taken from you. One easy way to figure out your car’s equity is to look up the trade-in value of your car on www.kbb.com and subtract the amount you still have left to pay on it. If it’s less than $3,000 the car is yours to keep, even with a bankruptcy filing.
The same goes for your home, except that the figures go up to $30,000 per person, $60,000 for a couple. When you take the total value of the home and deduct what you still owe, $30,000 actually turns out to be a lot of money, and is more equity than most people these days have in their homes. Just a decade ago many people did have at least that much equity – so be sure you correctly know your home’s value before filing Chapter 7 or you could lose it.
Before you meet with your bankruptcy lawyer in Salt Lake City, it is very helpful to come prepared with a detailed list of all of your assets. You can then review it together and they can tell you pretty clearly what you may lose or not. This assessment of your inventory may determine whether you choose to file Chapter 7 or 13 to keep your assets.