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There are 6 different types of bankruptcy, however, only 2 are common, Chapter 7 and 13. Chapter 7 bankruptcy is the most severe type where a debtor gives up all of his or her non-exempt property. The proceeds are spread to the unsecured creditors (such as credit card companies). In exchange, the debtor can be free of some of the debt. Child support, student loans, and some taxes can not be rid of in a Chapter 7 bankruptcy. Chapter 7 is now only available once every 8 years.
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