If you declare bankruptcy, the new federal exemption law allows you to keep certain property, except in states such as Virginia which have opted to set their own exemptions.
(Virginia basically allows the head of a household to declare a "homestead exemption" of $5,000 worth of property, plus specified articles such as the family Bible, wedding and engagement rings and a burial plot.)
In the District and Maryland, you may retain:
7,500 equity in your home. (A husband and wife filing together may each take a $7,500 exemption.) If the filer is not a homeowner or cannot use this entire amount towards equity in a home, he or she may apply all or part of the $7,500 exemption to any other property desired.
$1,200 equity in an automobile.
Every individual piece of furniture, musical instrument, clothing or personal effects worth up to $200.
$500 in jewelry.
$750 in tools or implements of trade and professional books.
$400 in any other property of the debtor's choosing.
Any amount of unmatured life insurance.
Professionally prescribed health aids (artificial limbs or hearing aids).
Payment through stock bonus, profit sharing, disability, illness or unemployment benefit.
Alimony or child support.
You must pay:
Support obligations to a spouse or child.
Student loans owed to a governmental unit or nonprofit institution of higher education.
Debts obtained through fraud.