This provision of the U.S. Bankruptcy Code provides the exemptions that can potentially protect your assets against being taken and liquidated for the benefit of creditors in a bankruptcy. You have a choice between either accepting the federal exemptions that are specified in that section, or, here in New Hampshire, you can take the exemptions that are provided by the New Hampshire state laws. You have to take all of one or the other, you can't take some of the federal and some of the state exemptions.
To answer further, without knowing the facts of your case, would not help. It would be kind of like a doctor, in the middle of surgery, blurting out "hey in the textbook in the chapter on appendectomies, what do I do next?"
You can bring up the section that you cited on line with a good search engine and read it. Or, and I highly reccomend this, look for a bankruptcy attorney in your area to help you make the best choice between the federal and NH state exemptions.