You may also have given a lien on property you already owned to obtain a new loan, such as a second mortgage to finance home improvements. Some creditors may obtain liens without the debtor's agreement, either because they have won a lawsuit against the debtor or because the law automatically provides a lien for certain claims, such as for duly assessed taxes. These are assets that you must list on your Statement of Financial Affairs and schedules and that you may shield from your unsecured creditors. The assets that you may protect in this way are defined by federal and state law. In about fifteen states you may chose either of the two laws, while in most states you may use only the state exemptions.
Exemptions vary widely.
In contrast, Florida allows a homestead exemption that protects from creditors a debtor's home and property so long as it does not exceed half an acre in a municipality or 160 acres elsewhere. Similar variations among the states are found concerning a broad array of other exempt assets such as autos, jewelry, household furnishings, books and tools of the debtor's trade. Congress has recently been considering proposals to introduce greater nationwide uniformity in exemptions, including a dollar cap on the most generous state homestead provisions. In cases involving an individual married debtor or joint debtors, several specific points about exemptions are worth noting. First, in joint cases, each spouse must claim exemptions under the same law, either both relying on state law or both relying on federal law.