Despite the fact that bankruptcy is controlled by federal law, there are a variety of exemptions to property and holdings that DO differ from state to state and can significantly impact your bankruptcy. These (state) exemptions are oftentimes more beneficial than the standard exemptions available federally. There are also cases where the federal exemption is better. Depending on where you file, your bankruptcy attorney will advise you which exemptions (your state or the federal) are most advantageous to your individual situation. This link will allow you to click on the state you are in and will give you the state exemption to compare to the federal.
When you file for bankruptcy, you don’t just lose all that you own. Exemptions, like the homestead exemption, can allow you to protect a certain amount of property in bankruptcy, like your home. These can sometimes be doubled if married. Most exemptions are specific to certain types of property (such as your house or car) while others can be used to exempt any type of asset (called wildcard exemptions). The average lower-middle class person filing will keep nearly all assets, since they will typically have very little equity and this is usually covered by exemptions. Sometimes, you can even keep new cars or various other property, by getting the trustee to allow you to reaffirm the debt (not bankrupt it) thereby keeping the asset and the payment.
Exemption laws and amounts vary significantly from state to state and can sometimes depend on whether you're filing a 7,11, or 13. For example, in Chapter 7, the trustee has the power to sell all nonexempt assets (see why determining best exemption by filing jurisdiction so important) to pay your creditors. Exemptions shield some to all of your property from the trustee. If you can exempt the entire value of an asset, you can keep it. If you can’t fully exempt an asset and the trustee sells it, you will be paid the full amount you were able to exempt.
In Chapter 13 bankruptcy, you get to keep all of your property even if it is not exempt; however, in a Chapter 13 (repayment plan bankruptcy) you must pay your unsecured creditors an amount equal to the nonexempt value of your assets. In general, the more property you can exempt, the less you will have to pay unsecured creditors in your bankruptcy.
Since you refer to Trump, I thought I'd mention that if you have a business that is incorporated or an LLC, LLP, or other limited liability type set-up, it can go bankrupt (usually a repayment 13 but not always), stay in business while liquidating debts and some assets, and not impact personal wealth. Your bankruptcy lawyer will fill you in on all issues pertinent to your situation.
