Types of Personal Bankruptcy No one wants to wind up in bankruptcy, but in some cases it’s the only option to get a
fresh start. Here are the basics. First, there are two types of personal
bankruptcy. Chapter 7 bankruptcy is where your non-exempt assets are liquidated to
pay off as much debt as possible and then the remaining balances are written
off. Most often your home, vehicles, and retirement accounts are exempt. With
a Chapter 13 bankruptcy a judge will assess your situation and designate a
trustee to establish a payment schedule to pay off your debts. This chapter is
normally used for people who are behind on their mortgage payments, back taxes, or who have child support issues. You will make payments every month until the debts are satisfied according to the court approved repayment plan. Once the
payments are complete any remaining balances are written off. Every filing
requires a means test. A means test is where your income level is compared to
the median income in your state. This determines if you qualify to file and
what type of bankruptcy you can elect. You’ll be required to go through
financial counseling to receive a certificate before you file. Chapter 13
bankruptcy can be a better option than Chapter 7 bankruptcy if you have assets
you want to protect. Filing for bankruptcy can stop the foreclosure process if the bank is trying to take your home. A Chapter 13 bankruptcy will
stay on your credit report for seven years and a Chapter 7 bankruptcy will
stay on your report for up to ten years Having these negative marks on your
credit report may make it difficult to qualify for loans and new lines of
credit for a period of time, but it’s not impossible and you can take steps to
rebuild your credit again. To get started simply fill out our form; or better yet, call us now and we’ll match you with the best solution for your situation. We are A-plus rated by the Better Business Bureau and have helped thousands of people become financially stable. So, don’t let struggle any longer. Give us a call. When life happens, we’re here for
you.