It doesn’t take much for most people to fall on hard economic times. The sudden loss of a job or the unexpected onset of a medical condition are oftentimes enough to do it, but so, too, can car trouble and housing repairs. If you’ve found yourself in this situation, then you probably know how difficult it can be to climb out of debt. But spending years or even decades trying to claw your way back can bring you nothing but stress and more debt. That’s why it might be time for you to consider bankruptcy.
Which bankruptcy option is best for me?
To answer that question, we have to look at the differences in the two main types of personal bankruptcy, Chapter 7 and Chapter 13.
Chapter 7 bankruptcy
This type of bankruptcy is often referred to as liquidation bankruptcy, but that doesn’t mean you will have to sell everything you own to repay creditors. It is likely that you may not in fact have to sell anything, depending on your exemptions and a careful review of documents. Any remaining debts may then be written off.
Chapter 13 bankruptcy
This type of bankruptcy involves the creation of a repayment plan that will span a number of years. The payment amounts are meant to be reasonable and manageable. If you successful fulfill your obligations under that plan, then outstanding debts may be forgiven. This bankruptcy option allows you to keep your assets.
The benefits of personal bankruptcy
This is just a brief look at these two types of bankruptcy and how they may benefit you. There are other benefits to bankruptcy, though, such as stopping creditor harassment, repossession, and even foreclosure. So, if you’re ready to reclaim your life and obtain a fresh financial start, then you might want to discuss your bankruptcy options more fully with an attorney of your choosing.