Whether someone is filing for Chapter 13 bankruptcy or Chapter 7 bankruptcy, they may have the same concerns regarding property. Many people question what property they will be allowed to keep and what they may have to forfeit. This is where property exemptions come in.
According to the District of Oregon bankruptcy courts, there will be some property exemptions no matter what bankruptcy option is selected. For example, Chapter 7 bankruptcy is the one that most people worry about. This is because it is known as liquidation bankruptcy, and involves the liquidation of certain assets. However, there are still certain properties that are exempt. Creditors will not be able to claim whatever is considered exempt. Potential exemptions are determined on a federal level and are based on the monetary value of certain items. In order to accurately determine which items are exempt, their value must be shown based on how much they are worth in the current market. If someone falls behind in payments, however, loan creditors may pursue.
As for Chapter 13 bankruptcy, many may find this more lenient when it comes to exemptions. A payment plan is necessary for this type of bankruptcy. This is because Chapter 13 revolves around paying back debts on a schedule. Because the debt-holder will be following a payment schedule to repay their debts, they are usually allowed to keep all of their property. However, this may change if the person in question is not able to make their payments.
While this may make Chapter 7 bankruptcy seem like an intimidating option, there are ways to make both types work for most people. Anyone who is considering filing for bankruptcy may wish to consider both options equally in order to truly determine what would work best for them.