Keeping your property after filing for bankruptcy is possible. Chapter 13 bankruptcy is for the filer that has a steady income but faces an unmanageable debt. Chapter 13 allows you to combine your debt in a repayment plan that will for 3-5 years give you a chance to pay it off. Once the payment period expires, all remaining debt will be discharged. If you keep up on your payments during this time, you will be allowed to keep your property.

With Chapter 7, the courts appoint a liaison to your case that will select non-exempt property and liquidate it to pay your creditors. In a period of three to six months your assets will be repossessed and used to pay off your debt. This may not affect your household furnishings.

It is a shame that not all debts can be discharged through bankruptcy. There are 19 different categories that cannot be discharged through Chapters 7 or 13. Below are a list of different kinds of loans that almost never discharged:

• Child Support and Alimony: You must live up to your responsibility as parent if you have kids, thus if you leave your family and are then required by the state to pay support to your family. You need to pay that money. Thus, child support cannot be discharged. If you are required to pay your ex’s legal fees or debt you cannot get out of it by filing for bankruptcy.
• Government Debt: Taxes owed, student loan debt, fines and other forms of debt owed to the government cannot be discharged through bankruptcy. Although there are some exceptions to these cases. It is best to speak with an attorney to help with your case.
• Secured Debt: Any debt that is attached to a secured piece of collateral, such as your home’s mortgage or a loan for your car payment, even that wedding band for that special someone in your life, cannot be discharged through bankruptcy. The only way to get rid of these debts are to either give back the items to the lenders or pay off your debts.
• Reckless Debt: As the name suggests, if you go spend a bunch of your money on a shopping spree that you cannot pay back and then suddenly file for bankruptcy, most likely the courts will deny you the ability to use it to pay off said debt.
• Debts You Forget to List: Anything you forget to list on your filing.

The Benefits of Automatic Stay

Dealing with creditors can be a pain. The constant harassment, the incessant phone calls. It can be overwhelming to constantly be reminded that you do not have enough money to pay for your things. Many people do not realize that once a person files for bankruptcy, an automatic stay is set to protect them from creditors. The automatic stay is put in place to stop this. Foreclosure on your business or house, lawsuits by creditors, evictions, or wage garnishments. Unfortunately, a stay cannot stop the government, such as the IRS from contacting you.

Of the many different types of bankruptcy, Chapter 13 is probably the most preferred one. This form of bankruptcy allows the filer to be put on a repayment plan last 3-5 years, which allows you to payback your debt at a pace, based on your income. This begs the question, if during your bankruptcy, your financial situation improves, can you end your bankruptcy early? Unfortunately, the answer is no. If your finances increase during these times, then your payments will be increased or until your debts is paid in full.