REALITY: This is probably the most widespread and damaging myth, because it stops people from even considering the idea of filing. The fact is the overwhelming majority of clients who we assist in filing bankruptcy don’t lose anything. Most are "no asset" cases in which the debtor keeps everything they own, including their home, cars and cash in the bank!
How is this possible? It is because most real and personal property is classified as exempt, meaning that you can keep it, even after receiving a debt discharge in bankruptcy. The Bankruptcy law usually allows you to keep your home, cars, furniture, appliances, retirement savings and other items. The property that can be claimed as exempt in bankruptcy varies from state of state, however, New York recently greatly expanded these exemptions; including a new “wildcard” exemption that can be applied to any asset. Most of the Chapter 7 clients we assist LOSE NOTHING when filing. In the rare situation where there is more property than can be protected by available exemptions, there is Chapter 13. In Chapter 13, you can even keep this property by paying a Chapter 13 plan payment.