Chapter 7 and Chapter 13 Bankruptcy

The two most common types of bankruptcy available in the United States for individuals are Chapter 7 and Chapter 13. It is important to understand the differences between the two.

A Chapter 7 bankruptcy allows you to ask the court to discharge the majority of the debt you owe.  In exchange, the bankruptcy trustee can take the property you own that is not exempt and sell it to repay your creditors. An individual may only apply for Chapter 7 relief once in any eight year period.

Laws differ from state to state, but most states will generally allow you to keep the following types of property in a Chapter 7 bankruptcy: