What happens to non-exempt assets in Chapter 7 bankruptcy?

In bankruptcy there are generally two choices an individual will have to choose between.  There is Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.  In the case of Chapter 13 Bankruptcy, the debts of the debtor are reorganized into a payment plan over a period of years which allows the debtor to retain most, if not all of his property.  In the case of Chapter 7 bankruptcy the idea is that property belonging to the debtor is liquidated in order to pay off creditors.

Chapter 7 Bankruptcy demands that the debtor turn certain property over to a bankruptcy trustee, assigned by the court, so that the property and assets can be sold and the proceeds applied to what the debtor owes creditors.  There are two types of assets/property when the court decides what it will take and liquidate.  There is "exempt" property, which is exempt from the liquidation process, meaning that the debtor is entitled to keep this property in order to start their financial life over again.  The other type is "non-exempt" property and of course this is the property that is sold to pay off obligations.

Non Exempt Assets include such items as: collections, like stamps, coins and other things of value; expensive musical instruments, unless the debtor uses them as part of his profession; a second vehicle; certain levels of cash, stocks, bonds, bank accounts and other investments; family heirlooms of value; and second/vacation homes.

Exempt property, on the other hand, are such things as: main vehicle, up to a certain amount; household appliances; necessary clothing; necessary household furnishings; jewelry to a certain amount; a portion of equity in the home; pensions; tools of the trade; a portion of wages; public assistance; and damages for personal injury.