Most people who file bankruptcy own various pieces of property. The types of property can be anywhere from a house to clothes and furniture. Exemptions are kind of like shields that allow you to cover up your property. This makes the property off limits from creditors being able to attach your property. These exemptions are only up to certain dollar values. However, they are rather generous, so generally no one loses anything. There are federal exemptions and state exemptions that you can choose from. The federal exemptions are the most generous, so most likely would be the best choice. However, there are rare ocassions where due to certain circumstances the state exemptions are you best choice. Prior to filing a Chapter 7 Bankruptcy, you would want to make certain that you could exempt all your property. If you are unable to do this, then the Chapter 7 Trustee could take the property and sell it. Most people would not want this to happen, so it would be necessary to file a Chapter 13 Bankruptcy. In a Chapter 13, the Trustee does not take and sell any property. You would simply have to pay your unsecured creditors (credit cards, installment loans, etc.) at least the amount that you are unable to exempt.