Assets That Can Be Protected In Chapter 13

If you are curious about some of the assets that you can protect by filing for Chapter 13 over Chapter 7, continue reading. Particularly if you are interested in safeguarding your family home as well as your car and personal items. The type of bankruptcy that you choose to file will determine which items you’ll be allowed to keep during your bankruptcy.

Discover What Assets Can Be Legally Protected In A Chapter 13 Bankruptcy

Your Home

One asset that you’ll be able to protect if you file for Chapter 13 is your family home. Even if your bank has given you a foreclosure notice as you have fallen behind on your mortgage repayments, it’s not too late to save your home by quickly filing for Chapter 13. As once your bankruptcy is in full effect, your bank will not be able to move ahead with the foreclosure of your home.

Instead, you’ll be able to work out a payment plan with your lawyer, which will be approved by the court, which will outline how you plan to catch up on your missed mortgage payments. By the end of the 3-5 bankruptcy term which you select, you should be up to date with your mortgage payments and as a result, will be able to keep your house. So long as you continue to keep up to date with all of your future mortgage payments. As you’ll still be required to pay your mortgage in full.

An Investment Property

Not only can you protect your family home which may be referred to in court as a homestead but you will also be able to protect your investment properties from being sold off by the bank. However, there are terms and conditions and you will only be able to keep an investment property if you can continue paying any debt which you may owe on it or can prove that it is bringing in a significant amount of money. Which will help you pay off your bankruptcy debts.

If you’re curious about whether you can keep a vacation home after filing for bankruptcy, as long as you can pay for its upkeep, it’s highly likely that the court will rule in favor of letting you keep your vacation property.

Household Items & Furniture

Not only will you be able to protect your home from being sold off but you’ll also be able to prevent your household items and furniture from being repossessed by creditors. So you won’t have to worry about items such as your television, fridge, sofa, bed or washing machine being taken from your home unexpectedly. One reason why it’s a great idea to protect your household items and furniture is that it could cost you upwards of $10,000 to replace most of your furniture items and electronics. In most cases, you will also be permitted to keep any artwork that is hanging in your home.


Your clothing will not be taken by creditors or the courts, so if you have an extensive wardrobe or want to ensure that your family member’s wardrobes are safe, they will be if you choose to file for Chapter 13. Over alternatives such as filing for Chapter 7.


While it may not seem important to protect your jewelry, if you file for bankruptcy using Chapter 13, you won’t have to worry about having your wedding rings taken from you or any precious family heirlooms which you have inherited.

Your Car

If you file for bankruptcy using Chapter 13, you’ll also be able to protect your car. As once you have filed for bankruptcy, creditors will no longer be able to seize your car in order to cover some of the outstanding debts which you have owing. So you will be able to rest assured that the car that you rely on, on a day-to-day basis will not be taken away from you. This is particularly important if you have a family and dependents who rely on your car, in order to get around.

However, do keep in mind that if you are still making loan repayments on your car, you will have to continue to keep up to date with your ongoing repayments during your bankruptcy, in order to keep your car. As if your trustee is unable to pay your car loan repayments on your behalf, due to a lack of funds in your bank account, there is a chance that you could still lose your car during your bankruptcy.

Retirement Account

Lincoln-Goldfinch Law Austin Bankruptcy Attorney Explains The Kind Of Assets You Can Keep After Filing For Chapter 13

If you have been putting money into an IRA account in order to save funds for your retirement, you may be relieved to hear that your IRA savings will be protected, if you choose to invoke Chapter 13. Which is important for your financial future as the more retirement savings you have, the more comfortable a retirement you’ll be able to enjoy!

It’s also worth keeping in mind that you will still be able to make voluntary payments into your IRA account if you would like to do so. Although, you will not be required to do so if you would rather have more disposable income left over after you have paid your compulsory bankruptcy payments. However, do keep in mind that there are benefits of investing in an IRA account now. As an example, you won’t have to pay taxes on the money which you place in an IRA account. Until you decide to claim the money in your IRA account, once you have qualified for retirement.

Assets Not Protected By Chapter 13

Items that are deemed luxury items are not protected by Chapter 13, this means that any high ticket items such as a boat are likely to be confiscated and sold to help decrease your debts.


So if you want to protect your family home, your investment properties, vacation home, personal items and furniture, clothing, and retirement savings, if you choose to file for bankruptcy, it’s well worth talking to your trusted lawyer about filing for Chapter 13. As you’ll be able to keep most of your assets.

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