Is Bankruptcy the Right Option for You?

Types Of Bankruptcy

There are two different types of bankruptcy that tin be used in most cases. Each 1 have a different set of regulations and guidelines that you must follow in order to measure up for and get the bankruptcy. If you are considering bankruptcy, it is of import to understand the differences in these types of bankruptcy and to take the 1 that best tantrums your needs and the 1 that you measure up for.

Chapter 7 Bankruptcy

This is the type of bankruptcy that is most often used by individual debtors. It allows for an individual or married couple to pass over out their debt by taking property and liquidating it. The money from the property is then used to pay off the debt that the individual have incurred. In some states, certain property can be retained. Only property that is exempt under the bankruptcy laws is eligible. In most cases, it will be cars and homes that are in good standing with their creditors. In some states, you will lose your home. This is the fastest manner to get out of debt but one that is going to pass over you make clean of assets.

Chapter 13 Bankruptcy

In this type of bankruptcy, the debtor and creditor work out a program that allows the debtor to pay off their debt in a payment plan. Most of the time, this procedure will go on through the paycheck of the individual. As long as the payment program is in effect, the creditor will not take your home or ownerships and you will not lose them. It is a good thing for those creditors that would have got lost more than if a Chapter 7 were filled and a good thing for the debtor because they can work on improving their overall credit.

Determining which type of bankruptcy is the right pick for you is difficult. If you can afford to pay off the debt through a Chapter 13, it is likely to make the least amount of damage to your credit. A Chapter 7 will stay on your credit report for up to 10 years. Nonetheless, it is wise to speak to your attorney about which type of bankruptcy is the right pick for your needs.