Among the many types of bankruptcy available there is the chapter 7 “liquidations” bankruptcy which is, if you have opted for this then the consumer is either being spending too much or unwisely and ended up with a large sum of debts, or a business went bust over a period of time. Filing the chapter 7 will cause the properties of the consumers being taken away and auctioned or sold off to pay the debts, and in return the bankrupt will be cleared of all previous debts.

There is a catch though, not everyone can file for the chapter 7 “liquidation” bankruptcy. If one’s income is enough to repay the total debts monthly over a period of time, it is wiser for the consumer to file for a chapter 13 “repayment plan” instead. However, not all properties can be taken away to be auctioned or sold off, there are also exempted properties such as clothing, car, furnishings which are stated in a list of exemptible items which many whom filed for the chapter 7 will be relieved to find that most of their properties are exempted from liquidation – including properties like their residing house or car so at least they have a shelter for the family.

a

Chapter 13 bankruptcy is about the filing of a financial plan to pay off overdue and current debts over a period of time, which is under the law stating the period of over three and up to five years. Filing this plan allows the bankrupt to repay his or her debts up to the monthly regular payments with some extra payment to cover up the outstanding payment previously. The special bit of this kind of bankruptcy is that one can keep his or her own properties such as their home or car unlike other cases where by personal properties are being taken away.

This can be the right filing choice made provided you are actually residing in your only home which is a property under your name, or given an amount of time you are able to pay off all the debts and some other situations. All one need to do is to do the filing of bankruptcy to the extent that, one is able to cope with the strict plan of repaying and clearing all the debts owed to the debtor within the time frame.

As long as one is able to follow the repayment schedule, he or she does not need to worry about the coming doomsday and creditors taking away all their belongings leaving them no shelter to cover their family or job to earn wages to repay the debt. File for the chapter 13 bankruptcy and a good plan is the key to repaying all the outstanding debts in the meantime keeping your own properties to yourself for that moment.

a