Q: How do we know which kind of bankruptcy we can do after a foreclosure has been finalized?
A:
If you are giving up the house, you would want to do a Seven (7) to discharge any deficiency.
For a regular person there are two basic types of bankruptcy. A Chapter 7, also called Liquidation or Straight Bankruptcy, and a Chapter 13, also called Reorganization. A 7 takes a few months, and any unexempt property will have to be either purchased back or surrendered to the Trustee. A 13 is much more complicated and is usually used in situations where a person wants to keep their home, which is in or close to foreclosure. A 13 requires that the person have a regular income and that a feasible plan for payment be presented. Though certain types of debt survive a discharge (i.e Domestic Support, Taxes, Student Loans, Debts relating to a DUI, ect), all debt, including these must be listed.
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