Chapter 7

• Chapter 7 is known as a liquidation bankruptcy. Generally all of your unsecured debt will be wiped away in this type of filing, but this only occurs after you have handed over non-retirement savings and sold your non-exempt property in order to pay back some of what you owe to your creditors. Cash in your checking account is not exempt from seizure to pay your debts.
  
  

Chapter 13

• In Chapter 13, the wage-earner's bankruptcy, you must make a plan to pay back some or all of your debts on a schedule over three or five years. Because of this pledge to repay, there is more leeway in a Chapter 13 filing to be allowed to keep some savings, although you will usually be required to give up at least a portion of your cash to your repayment plan.
  
  

Disclosure

• It is extremely unwise to attempt to hide any of your assets during bankruptcy. The trustee has wide-ranging powers to find out information about your financial situation, and any evidence that you have not been forthcoming about your situation will result in your filing being dismissed, and could also lead to criminal fraud charges.
  
  

Exemption Planning

• If you want to convert your liquid asset, the cash in your account, into an exempt asset, one that you may keep during bankruptcy, there are sometimes ways to do it. However, you have to tread very carefully to avoid committing fraud and invalidating your bankruptcy filing. You should consult with a bankruptcy attorney well ahead of your planned filing and get sound advice on how to proceed.