Expert: Terry Leeders - 1/8/2008

Question
QUESTION: I'm just wondering if there is different levels of bankruptcy.

ANSWER: Chapter 7 eliminates unsecured debts, like credit cards, medical etc.  You can choose to keep (reaffirm ) your car and house if you want to keep them.

Chapter 13 is wage earner bankruptcy, whereby you pay back a portion of your debts, usually 10% and up based on your budget.  This is designed to stop foreclosures, or if your income is too great for chapter 7.

Ch11 is for business and ch12 is for family farmers.

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QUESTION: for a chapter 7 do they take what you have bought on the credit cards or do you get to keep the stuff you bought.

Answer
If you financed big ticket items on a store account, they would be considered secured. (like a car note)  In that case, you can choose to reaffirm the debt to keep the items.
Normally you get to keep the items purchased, as long as they are exempt under your local statutes.

Creditors can object for recent usage over $600 in the last 60 days, or for luxury items purchased 70 days before the bankruptcy.  Speak to a local bankruptcy attorney to help you set up your case to get you the best relief possible.