In a Chapter 13 case, a debtor cannot lose assets if they are not exempt. However, the debtor will be required to pay into the Chapter 13 plan the value of those assets. Since this can result in additional plan payments, liquidating such assets before filing can be an important part of "pre-bankruptcy planning."
However, you need to be very careful as to how you spend the money from assets you liquidate just before filing. Using the funds for various necessary expenses, such as those that you mention are good. However, you should not repay any debts, especially to family members; you should not give any money away; and you should not purchase any luxury items.
An experienced bankruptcy attorney can give you the necessary guidance to engage in pre-bankruptcy planning without running afoul of any laws.
My bankruptcy practice has four convenient Long Island offices, Feel free to give us a call for a free consultation.
Generally, you do not lose property in a Chapter 13 bankruptcy. If you cannot protect it, you will be able to pay out its value to your creditors over time. You can sell it and use it for general living expenses. Keep in mind that you will have to disclose the sale to the bankruptcy trustee. Make sure that you sell it for market value; giving it away can mean more problems for you.
Definitely consult an attorney in your area.