A Chapter 7 bankruptcy is called a liquidation bankruptcy or “straight bankruptcy.” However, the name is typically a misnomer because it implies that someone’s assets would be automatically liquidated if they filed bankruptcy. There are exemption lists that allow almost all debtors to retain all of their property.
The Texas exemption schedules allow almost all debtors to retain their homestead, their personal property, and their retirements. Chapter 13 bankruptcy is called a “Wage Earners Plan.” The exemption schedules also apply in a Chapter 13 bankruptcy. Most people are able to discharge their credit card debt in either a Chapter 7 or Chapter 13 bankruptcy.