Bankruptcy is an option that you have when you have so many debts that you cannot pay them back on time or with any certainty. Some people opt for bankruptcy to get a fresh start, while others turn to it with no other options.
The good thing about bankruptcy is that there are different types. Chapter 7 bankruptcy, known as liquidation bankruptcy, helps you by liquidating assets. Some people believe that they’ll lose everything through this kind of bankruptcy, but exemptions make it possible to maintain many of the things you already own.
Another kind of bankruptcy, Chapter 13, is designed to help you make a single payment monthly on your debts. Over the course of 3 to 5 years, you’ll pay off your debts completely.
Why should you consider bankruptcy?
Bankruptcy isn’t right for everyone, but you should consider it if you have multiple unsecured debts that you’re struggling with. It’s possible to eliminate your unsecured debts so that you can get back on firm financial footing.
Are there debts bankruptcy won’t eliminate?
Normally, bankruptcy doesn’t eliminate debts such as back taxes, child support, spousal support or student loans. However, there may be ways to reduce what you owe on those debts if you can show that you are in a difficult financial position.
Our site has more on bankruptcy and what to expect if you’re struggling with debt. There are options available to you so that you can get back on track with your finances. Choosing the right kind of bankruptcy will help you move forward with better financial security.