Bankruptcy is a process in which consumers and businesses can eliminate or repay their debts under the protection of the federal bankruptcy court. We recommend you consult with an attorney, Certified Public Accountant (CPA) or another financial professional specific to your circumstances. Depending upon your situation they may advise you to get an appraisal. Bankruptcies are generally divided into two types:
Liquidation – Chapter 7 bankruptcy falls under the liquidation category. This type of bankruptcy involves a trustee liquidating some of your property to pay back your debt. However, you may keep property that is exempt under individual state laws
Reorganization – Chapter 13 is the most common form of reorganization bankruptcy. Under Chapter 13 bankruptcy you keep all of your property, but must make monthly payments over three to five years to repay all or a settled amount of your debt
Both Chapter 7 and Chapter 13 bankruptcy have many rules and exceptions including which debts are covered, who can file, and what property you can and cannot keep. It is important to speak with a lawyer if you are considering bankruptcy.