What You Can (and Can’t) Keep After Filing Chapter 7 Bankruptcy

January 1, 2026

What You Can (and Can’t) Keep After Filing Chapter 7 Bankruptcy

Filing for Chapter 7 bankruptcy can be one of the most effective ways to eliminate overwhelming debt and start fresh financially. However, many people hesitate to file because they fear they’ll lose everything — their home, car, or personal belongings.

The truth is, bankruptcy law is designed to give you a second chance, not to leave you with nothing. Most people who file for Chapter 7 keep much or all of their property.


At the Jonathan Stone ESQ CPA MST LLC, we help individuals in Hackettstown, New Jersey, navigate the bankruptcy process confidently. With decades of legal experience and a strong background as a CPA, Jonathan Stone provides the financial and legal insight needed to protect your assets and secure your financial future.


📞 Call 908-829-6555 to schedule a consultation with a trusted Chapter 7 bankruptcy attorney today.


How Chapter 7 Bankruptcy Works

Chapter 7 bankruptcy — sometimes called “liquidation bankruptcy” — allows individuals to discharge (wipe out) most unsecured debts, including:


  • Credit card balances
  • Medical bills
  • Personal loans
  • Utility bills
  • Some tax obligations


In exchange, a court-appointed trustee reviews your financial situation and determines whether any non-exempt assets can be sold to repay creditors. However, New Jersey and federal exemption laws protect most of your property — meaning many filers lose little to nothing in the process.


What You Can Keep After Filing Chapter 7 Bankruptcy

Most people who qualify for Chapter 7 are able to keep their essential property. Here are some of the most common protected assets:


1. Your Home (Equity Exemption)

If you have equity in your primary residence, you may be able to protect it under the homestead exemption. Depending on your situation and which exemption system you choose (state or federal), a portion of your home’s value can be shielded from liquidation.


An attorney can help you determine which system offers you the greater protection — and how to structure your filing to maximize those exemptions.


2. Your Vehicle

Many Chapter 7 filers are able to keep their car, especially if it’s used for work, school, or daily life. Both federal and New Jersey law allow exemptions for vehicles up to a certain equity value.


If you’re still making payments, you may be able to reaffirm the loan, meaning you continue to pay your car lender and keep the vehicle.


3. Personal Property

Items like clothing, furniture, household goods, and even jewelry are typically protected under personal property exemptions. The law recognizes that these are essentials — not luxuries — and that you need them to maintain daily life.


4. Retirement Accounts

Funds in 401(k)s, IRAs, and pensions are generally exempt from bankruptcy. These accounts are protected to ensure your long-term financial stability.


5. Wages and Public Benefits

Recent wages you’ve earned but haven’t yet received are often protected, as are public benefits such as:


  • Social Security
  • Disability payments
  • Unemployment benefits
  • Veterans’ benefits


These exemptions ensure that filing bankruptcy doesn’t leave you unable to meet basic needs.


What You May Not Be Able to Keep

While Chapter 7 provides broad protection, certain debts and assets are not dischargeable or exempt, including:


  • Luxury items (high-value jewelry, collectibles, or recreational vehicles)
  • Second homes or investment properties
  • Recent tax debts
  • Student loans (except in limited cases of undue hardship)
  • Child support and alimony obligations
  • Court fines or criminal restitution


If you own property that exceeds exemption limits, your trustee may sell it to repay creditors — but this is rare in most consumer cases.


Why Most People Don’t Lose Anything

The majority of Chapter 7 cases filed in New Jersey are “no-asset” cases, meaning there are no assets available for liquidation. With proper planning and accurate filings, it’s entirely possible to:


  • Protect your home and vehicle
  • Eliminate unsecured debt
  • Keep your retirement savings
  • Preserve your day-to-day essentials


At the Law Offices of Jonathan Stone, we ensure every exemption and protection available under law is applied to your case, giving you the best possible outcome.


The Role of a Bankruptcy Attorney and CPA

Navigating the complex rules around exemptions, property valuation, and eligibility requires both legal knowledge and financial precision. As both an attorney and CPA, Jonathan Stone provides a unique advantage:


  • He understands how to analyze your assets and debts accurately.
  • He ensures all required documentation is complete and compliant.
  • He helps clients avoid errors that could jeopardize exemptions or delay discharge.


This combined perspective gives clients peace of mind — knowing their case is being handled by a professional who understands both the law and the numbers behind it.


Start Fresh — Without Losing Everything

If you’re facing unmanageable debt, Chapter 7 bankruptcy may offer the relief you need. You can protect your property, eliminate most debts, and begin rebuilding your financial life with confidence.


At the Law Offices of Jonathan Stone, we’ll guide you through every step of the process with respect, accuracy, and care.

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