Property Bankruptcy Can't Protect
Fortunately, bankruptcy does protect a majority of personal property through exemptions. The exemptions allowed depend on the state and each state varies on how much is covered. There are different exemption categories for assets with each having a limitation on how much value is protected. Federal exemptions are also available and in some cases, they offer more protection than at the state level. If you have an asset that has excess equity, meaning it has more value than the exemption allows, the asset may qualify for a "wildcard exemption."
Exemptions help debtors keep their personal property during and after bankruptcy proceedings. They offer protection on a variety of items from your home, vehicle, furniture, jewelry, retirement funds and more. The exemptions allow debtors to maintain necessities for daily living while not having to worry about your items being used to satisfy creditors. Occasionally, there are assets or property that is considered "non-exempt." In a Chapter 7 bankruptcy , non-exempt property could be used to satisfy creditors up to a certain amount. But, several states offer what's called the wildcard exemption which may cover excess equity.
As stated earlier there are different exemption categories but the wildcard exemption is different in its own way. It has the ability to offer exemptions on multiple types of property at the same time. This exemption may be offered up to a certain amount and portions of it can be used to protect different assets. The wildcard exemption is available on the federal and state level but if you believe your property has excess equity, review available options by consulting with your bankruptcy attorney.