When a debtor files for bankruptcy, there are certain types and amounts of property that are characterized as exempt property for bankruptcy purposes. The exempt status of a particular piece of property is based on both federal and state law, and state laws tend to differ on the types and/or amounts of property that are exempt and non-exempt. If a piece of property is exempt, then it cannot be taken by the U.S. Bankruptcy Trustee to pay off your debts. If a piece of property is non-exempt, however, it is subject to liquidation and distribution by the U.S. Bankruptcy Trustee. Some common types of exempt property include a certain amount of equity in one's private residence, items of personal property such as clothing and furniture, and certain exempt retirement accounts.