There has been a delusion that when and if an individual files for bankruptcy; she or he will lose everything starting from their auto and house to the spoons in their kitchens

and socks in their drawers. But this is not correct. Effectively, there are some things that you are about to

lose while there are a lot others you're going to keep. As an example, if the house you are living in isn't under foreclosure, then you can keep it even after you

have filed for bankruptcy, and this is down to the fact that a place under foreclosure has a whole different process. More hence your private effects are also going to remain

in your possession even after you have filed for bankruptcy.

Essentially, there are 3 sorts of bankruptcy. These are named chapter 7, chapter 11 and chapter 13. Since

bankruptcy falls into federal law, you're going to have to file your bankruptcy in a Fed. court. Under chapter 7

bankruptcy, there is a total liquidation of all assets. This is used to file private bankruptcy claims as it wipes the slate

clean. Under chapter 11 bankruptcy, the debts are reorganized. In this circumstance, some of the debts are

reduced or discharged while some others are still going to be paid by the trustee.

Chapter 11 bankruptcy is designed for firms that are seriously in debt looking for relief but still have to continue

operating. Under chapter 13 bankruptcy, the debts are often reduced but they are not discharged completely.

Here, the debtor is given authority by the bank to think up a plan of how he is going to scale back the debt over the

next couple of years.

Nevertheless you should really know that different states have distinct rules concerning what you can keep and

what you can lose as far as filing for bankruptcy is concerned. In most states, you get to keep your personal

property such as clothes, shoes, furniture, bed and several items. In other states, the exemptions customarily cover

your house as well as your automobile. In some states like Texas and Florida, you may have a limitless home

exemption. In these situations, you may have a pricey mansion by the beach and still file a chapter 7 bankruptcy.

On the other intense, there are some states where the exemption for personal residence is as low as $5,000.

Latterly, the law was modified to make it impossible for an individual to head to another state where that person hopes to exploit the softer exemption benefits in that

state. Under these laws, if you'd like to exploit the exemption laws of a certain state, you're going to

have resided in that state for 30 months (i.e. 2 and a half years) .If you are considering selling your property to a relative or a family member, this is a mistake because anytime you wish to file for a bankruptcy, you're

going to disclose these transfers.

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