Types of Bankruptcy

• You have two options when filing for consumer bankruptcy: Chapter 7 or Chapter 13. In a Chapter 7 bankruptcy, your liability for certain debts is eliminated entirely. In exchange, you must agree to surrender your non-exempt assets to the bankruptcy court. These assets are then liquidated and distributed to your creditors in lieu of full payment. Chapter 7 is typically best suited for someone with a large amount of unsecured debt, few assets and insufficient income to repay what they owe. In a Chapter 13 bankruptcy, you keep your assets but you must agree to repay some or all of your debts over a three- to five-year period.