In terms of consumer bankruptcy (non-commercial) filings, there are two principal types - Chapter 7 and Chapter 13 bankruptcy.

Chapter 7 bankruptcy calls for doing away with nearly all of a persons debts, but calls for an enormous sacrifice - virtually everything that the debtor owns is sold off to pay back debtors, and it is just about certain that if the individual declaring Chapter 7 bankruptcy possesses a home, they'll lose that home.

Chapter 13 bankruptcy lends a person the chance to keep their home, as long as payments can be made.

Chapter 13 bankruptcy calls for structuring a repayment plan which can typically last up to 5 years.

Most folks are qualified for Chapter 13 relief if their position is such that their unsecured debts are lower than $336,900 and secured debts are less than $1,010,650.
Examples of Secured debts are those similar to a mortgage or a vehicle.
Unsecured debts are typically debts similar to credit card bills, and some loans that do not have collateral.
When somebody files for Chapter 13 bankruptcy shelter, they agree on a payment program with their creditors and pay back that over the course of five years At that point, the creditors should cease collection action against the debtor.

As soon as the debtor files for Chapter 13 bankruptcy protection, debtors are supposed to end their collection activities. It doesn't imply that they won't get their money returned or that the debtor no longer owes the proceeds.
The debtor usually will have to go to a 341 meeting. There they will have to lay out a list of all of their debts and indebtedness, their income, how their income is generated, and their assets. The creditors could also show up at this meeting. A trustee is designated by the court and will also be present at this meeting. There are no concluding or final decisions made at the meeting. The purpose of this meeting is to determine and gather all of the facts in the case.

Just like in a Chapter 7, the debtor still must repay taxes, student loans, child support, certain types of lawsuit judgement against them, and other various types of obligations.
Chapter 13 is typically going to be the better alternative for debtors since it allows for them to hold back more of their assets and to continue to stay in their house if they own a house.

Author: Alan King

About the author:
Alan King is committed to helping people successfully get out of debt using a practical common sense approach. To learn more on how to become debt free in as little as 3-5 years no matter your income visit http://www.onlinewaystowealth.com/

Article source: Free Bankruptcy Articles.