Filing bankruptcy is never good. It causes major damage to your credit score and financial standing and in many cases it takes away all of your assets. It is not something that anyone wants to go through.
Unfortunately bankruptcy is quite common and especially prevalent during a difficult economic period where people are losing their jobs.
It is a common misconception that all forms of bankruptcy are equal. Chapter 7 and chapter 13 bankruptcy are in fact very different and both have different effects on your financial future.
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Filing for chapter 7 bankruptcy typically means you are in financial distress and there is no way that you are going to be able to pull yourself out of it. Your assets will be liquidated and the money will be used to pay off your debts and make deals with your creditors as they are not likely to be paid off in full. Chapter 7 bankruptcy will give you a completely fresh start but it will take approximately 7 years before it is removed from you credit record.
Businesses often file chapter 13 when they are in financial distress but are still generating income. Whether you are an individual or a business when you file for chapter 13 bankruptcy you are confident that with a little help you can pull yourself out of debt. The main requirement for filing is that you still have a steady income coming in. This money will be necessary for paying off your debts. You design a payment plan, get it approved by the courts and stick to it for 3 to 5 years. During this time your payments are interest free and you won't have to suffer through creditor phone calls and threats.
Chapter 13 bankruptcy stays on your credit score for about 2 years less than chapter 7. This can make a big difference for getting back on your feet.
If something were to happen to prevent you from completing the payments agreed to under your chapter 13 filing than it is possible to convert your filing to chapter 7. There is also a possibility that you could get your payment plan adjusted if necessary.
No one should try and decide between chapter 7 and chapter 13 alone. Especially if you are not educated in bankruptcy law. That is why you need to find a reputable bankruptcy attorney to represent you and guide you through the bankruptcy process. Their expertise will be worth every penny.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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