Solve your debt in 5 days or less!

well being, and perhaps even a little bit more.  Although 
there is a federal exemption law, only in states and the 
District of Columbia allow you to use it These states let 
you choose between the state and federal exemption laws.  
The in states are: 

Connecticut
Hawaii
Massachusetts
Michigan
Minnesota
New Jersey
New Mexico
Pennsylvania
Rhode Island
Texas
Washington
Wisconsin
Vermont

The other states require a person declaring bankruptcy to 
use state exemptions. 
Here are some examples of things that may be exempt, 
depending on the state in which the petition is filed. 

·	Personal effects
·	Furniture
·	Cars (up to a certain amount of equity)
·	Tools of a trade
·	Equity m a residence (sometimes the entire residence)
·	Clothes
·	Household goods
·	Books
·	Jewelry

One very interesting exemption is the homestead exemption.  
When John Connally, the former governor of Texas, declared 
bankruptcy a few years ago, many people were surprised that 
he was allowed to keep his huge mansion, valued at several 
million dollars.  Texas has a homestead exemption that 
allows anyone petitioning bankruptcy to keep up to one acre 
in an urban area or 100 acres in a rural area, regardless of 
value.  The ex-governor may have had a very good attorney, 
but many other states also offer homestead exemptions. 
One bankruptcy strategy is to sell non-exempt property 
before bankruptcy and convert it into exempt property.  For 
example, a Texas resident might sell non-exempt assets and 
use the proceeds to pay off the home mortgage on her 
homesteaded property.  You would almost certainly want to 
consult an attorney before attempting this kind of transfer 
of assets, however, since the court could very easily view 
such action as an abuse of the bankruptcy laws. 
Even if a certain amount of equity is exempt, your creditors 
can often sell the asset to recover any excess equity you 
may have.  If you own a car worth $10,000, for example, and 
you only owe $5,000 on it and your state exemption is 
$1,200, the creditor can sell the car and give you $1,200.  
Some states allow 'Wildcard" exemptions that can be used to 
cover the difference. 
Knowing which debts are dischargeable and what the law 
allows a petitioner to keep, a rational decision can be made 
whether to file for bankruptcy.  If you do choose to file, 
there are several ways of going about it-as well as several 
pitfalls to avoid. 
Taking Action
When you've decided to take action you can begin the filing 
process.  If creditors are knocking on the door and 
repossession, foreclosure, or garnishment is just around the 
comer, it may be wise to consider using an emergency filing 
to obtain an automatic stay.  An automatic stay stops 
creditors from taking any further action until the case goes 
before a bankruptcy judge.  Unlike a bankruptcy filing, 
which usually contains several pages of information an 
emergency filing is only one page long and contains a list 
of your creditors.  The rest of the petition has to be filed 
within fourteen days or the case is dropped.  The court will 
send notices of the pending bankruptcy to the creditors 
listed, who must cease all further collection action.  If 
they do not cease, send them copies of the automatic stay 
and request that all further collection action cease.  A 
creditor can ask that the automatic stay be lifted, allowing 
him to continue collection action.  Only a landlord trying 
to evict you from a rented dwelling will usually prevail, 
unless there is a long-term lease involved.  If you are 
renting on a long-term lease, which could be considered an 
asset, the landlord may have to wait for a formal @g in 
order to evict YOU. 
Once the wolves are at bay, another decision will need to be 
made: whether to hire a bankruptcy attorney.  Attorneys, as 
we all know, are expensive.  In the case of a complicated 
bankruptcy, however, they can be invaluable.  If you have 
quite a bit of property or valuables, if you are trying to 
move money from non-exempt to exempt assets, if your 
creditors try to make your debts non-dischargeable because 
of fraud, or if there are any other complications, you may 
wish to hire an experienced bankruptcy attorney.  Shop 
around.  Don't be afraid to negotiate.  Ask a lot of 
questions and talk to several attorneys before you make your 
decision. 
If you have a very simple bankruptcy or can't afford an 
attorney, invest $15 in a good do-it-yourself bankruptcy 
book.  It will give in-depth information not covered in this 
chapter.  Typing services am also available to type up 
bankruptcy forms.  They are reasonably priced and, in the 
case of a very simple bankruptcy, can take the place of an 
attorney.  If your case is complicated and you can't afford 
an attorney, do your own research.  Read a consumer 
bankruptcy manual first and then consult a good legal 
library.  There are several legal guides devoted strictly to 
bankruptcy.  Once you or your attorney have prepared your 
case, you're ready for formal work. 
The Filing Process
All the appropriate papers can be obtained from your local 
bankruptcy court.  Consult the yellow pages under Government 
Services (usually in the beginning of the book) for an 
address and phone number.  The court allows you fourteen 
days from the date of an emergency filing to complete the 
formal process.  If Chapter 7 bankruptcy is being filed, you 
will need to send in the following forms after you have 
received them from the court: 
·	Statement of Financial Affairs.
·	Schedule of Current Income and Current Expenditures.
·	A schedule describing your debts.
·	A schedule describing your property.
·	A schedule listing exempt property.
·	A summary of the above schedules.
·	Statement of Intention in regard to your secured property 
and what you intend to do with it 
·	Statement of Executory Contracts describing contract that 
will need to be fulfilled, such as auto leases. 
·	Bankruptcy Petition cover sheet.
·	Mailing addresses of all creditors.
·	Any required local forms.
A fee will also be assessed, usually $90, due at the time of 
filing.  The court will usually accept installments of a 
four-month period.  An application for installments must 
accompany the petition. 
After your petition is filed, a meeting of the creditors 
will be arranged.  The court appoints a trustee to preside