Will a person lose all of his or her property if he or she files a chapter 7 case?

Usually not.  Certain property is exempt and may not be taken by creditors unless it is encumbered by a valid mortgage or lien.  A person is usually allowed to retain his or her unencumbered exempt property in a chapter 7 case.  A person may also be allowed to retain certain encumbered exempt property.  Encumbered property is property against which a creditor has a valid lien, mortgage or other security interest.

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