Bankruptcy can offer filers a new start. The bankruptcy options available can wipe out debt or create a reasonable, manageable payment plan. Choosing to file for bankruptcy is a very effective means of getting back on your financial feet. Although bankruptcy isn’t as morally repugnant as it once was, it’s still a serious matter. All financial experts agree that bankruptcy should be a last resort.
Consumers have two bankruptcy options. Chapter 7 bankruptcy, also known as liquidation, and Chapter 13 bankruptcy which is a repayment plan.
Chapter 7 is for people with such significant debt that there is almost no chance they’ll ever be able to re-pay what is owed. If a chapter 7 discharge is granted, your creditors cannot collect payment from you. After your debts are discharged, you can start over financially. While there is plenty that is protected in Chapter 7, your belongings can be liquidated by the court trustee who will then convert them into cash for the creditors.
The other option, a chapter 13 bankruptcy, can be more complex. If you want to keep all of your property, chapter 13 should be considered. One of the largest benefits to filing a chapter 13 is that foreclosure can be stopped on your home. This type of bankruptcy requires both a steady income and, more importantly, the discipline to adhere to the court-approved payment plan for several years. Only about 30% of ch 13 filers complete their payment plan.
Regardless of what type of bankruptcy you choose, the road to a successful outcome is paved with honesty. If you try to hide income or assets, your bankruptcy can be dismissed altogether. You could them be in worse shape than before financially. Free bankruptcy forms are available online.
