Limitations

• Under bankruptcy laws in Delaware, filing bankruptcy can help individuals to eliminate or restructure most types of debt. Bankruptcy may not include alimony, child support or most back taxes. Student loans do not qualify. Purchases over $550 for luxury items in the last 90 days may not be included. Fraudulent debts and debts owed to government agencies also do not qualify. In addition, cash advances of $825 or more obtained in the last 70 days also do not qualify.
  
  

Personal Property

• Delaware bankruptcy laws limit what an individual filing bankruptcy can keep. Personal property up to $500 in value is retainable. Assets including pianos, sewing machines, and family bibles, pictures and burial grounds may be exempt. Tools or fixtures relating to a trade of business may be kept, up to $75 in value in New Castle and Sussex Counties, and up to $50 in Kent County.
  
  

Funds Kept

• Individuals are able to keep at least 85 percent of wages or commissions, partnership property, estate property valued at $5,000, retirement plans and insurance proceeds. Retaining of public assistance and unemployment compensation may be possible. Annuity contract proceeds also remain in place beyond the bankruptcy. Employee-sponsored group life insurance proceeds may also be kept.
  
  

Real Estate

• In Delaware, real estate is not automatically included in bankruptcy. Rather, the lender has the right to foreclose on the property if the homeowner fails to make payment according to the terms of the loan. The bankruptcy court will allow you to keep your home assuming you are in good standing with the lender. If there is a large amount of equity in the home or you do not owe anything on your home, it may go up for sale during bankruptcy to pay lenders.
  
  

Vehicles

• Individuals who owe money on their vehicles need to reaffirm the debt to a secured lender. The loan must be reaffirmed within 45 days after the 341 meeting. This meeting is with the lenders, attorneys and representatives from the bankruptcy court. It occurs before the bankruptcy may be discharged. If you default on the car loan after reaffirming the loan, and the car is repossessed, you are liable for repossession deficiency. Repossession deficiency is the amount still owed on the vehicle at the time of repossession. For example, if a lender repossesses the vehicle due to nonpayment, and the car loan has a balance of $2,000, the lender can still legally require the borrower to repay the $2,000.