Short Answer – You will Keep Most of It
In bankruptcy, property is divided into two classes: exempt property and nonexempt property. Exempt property is property that either state or federal law has declared to be unavailable to creditors in trying to collect debt. The purpose of bankruptcy exemptions is to protect certain basic types of property so that you are not left totally destitute after bankruptcy. These are assets you may keep to help you get a fresh start financially. All other property is considered nonexempt, and may be sold by the bankruptcy trustee to at least partially repay your creditors. The Arizona bankruptcy court in Phoenix, Arizona has an exempt property list for your use. As you can see, most property that a typical family has will be protected.
As a practical matter, in most Chapter 7 bankruptcies, nonexempt property is of minimal value. If the trustee determines that nonexempt property is of little value, or that it would be problematic to sell it, the trustee will abandon the property and you will keep it.
However, even if an item of property is exempt, if it is connected to a secured debt and you don’t keep up your payments, the creditor may take the property securing the loan (through foreclosure or repossession). Therefore, in order to keep property that is security for a debt, you will need to either keep up your payments or negotiate a new payment plan with the creditor. Also, if your equity in the property exceeds the amount the law allows for an exemption, the trustee may require sale of the property.