Bankruptcy is a relief to the debtors who are really worried about their debts. Bankruptcy has manifold aspects. The debtor files for bankruptcy under any of the suitable chapters as introduced by US code. Under bankruptcy chapter7, a debtor gets relief in form of exempted property which he /she can retain as his/her possession. This procedure of safeguarding a certain amount of property in favor of the debtor actually aims for a fresh start when they are overburdened by debts. As for an example, in many states the defaulter is allowed to keep clothing, household furnishings, an expensive car (may be inexpensive one that depends on the state law). Even after the closure of the bankruptcy cases the debtor needs at least some basic assets to lead his life further. Hence the bankruptcy code identifies basic needs and provide various property exemptions for the debtor. Just like the rules for the exempted property varies from state to state, the percentage of exemptions enjoyed by the debtor is actually determined by the district court. There are also few limitations in this case, as all the properties of the debtor do not come under this category. The assets which are not discharged according to the chapter 7 bankruptcy code are excluded from this category. As it is already discussed, that the properties like household furnishings, cars are considered to be exempted similarly if the debtor is having any retirement fund or any other such kind of a fund it is considered to be out of reach of the creditors. Actually the amount of exempted property of the debtor depends on the state where he resides.
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