Types of BankruptcyThere 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.
Chapter 13 BankruptcyIn a chapter 13 bankruptcy, the debtor keeps ownership of all his or her assets. In exchange, the debtor will provide some of his or her future income over the next 3 to 5 years. The amounts of the payments vary by how much the individual is in debt.
Alternatives to BankruptcyIt is highly recommended that you first try everything that you can to keep from claiming bankruptcy. A bankruptcy will stay on your credit reports for 7 years. Many employers require a credit check and will not hire individuals with a bankruptcy on thier report.
Before filing for bankruptcy, we suggest trying debt settlement or debt consolidation first. To learn more about this option fill out the form at the top of the page or call 888-314-1403. Another option could be a short term Cash Advance loan to get you to your next payday. Lastly, if you have medium to good credit now, you could get a Personal Loan. The interest rates will be high, but it could save you thousands if you have to pay high interest rates for the next 7 years.
Other Bankruptcy Related Articles
- Bankruptcy Law : Chapter 7 & 13
- Alternatives to Filing for Bankruptcy Protection
- What is Chapter 13 bankruptcy and how will it affect me and my future?
- What Property Can I keep in Chapter 7 bankruptcy?
- Divorce Decrees and Bankruptcy Beginner's Guide
- Student Loans: Can these be settled when I file for Bankruptcy?
- Debts that cannot be included in a Chapter 7 Filing
- Statute of Limitations of Debt
- FAQ on Chapter 7 Bankruptcy Protection