Bankruptcy Help
Filing bankruptcy is a legal financial option for those in serious debt. It can clear a person's debt, but it can also greatly damage a person's credit. Individuals should only use bankruptcy as a last resort when experiencing grave financial troubles.
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Chapter 7 Bankruptcy
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Filing chapter 7 bankruptcy is the most common choice. This is considered a "liquidation" and it discharges debts, no longer requiring any payments. The debt is never required to be paid back.
Chapter 13 Bankruptcy
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Chapter 13 bankruptcy is considered a "reorganization" where specific payment plans are set up by bankruptcy court. People are often forced to go with this type of bankruptcy if not approved for chapter 7. Some debts may be reduced and some may be completely excused, depending on the individual's ability to pay.
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Chapter 11 Bankruptcy
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Chapter 11 bankruptcy is also considered a "reorganization" as it is much like filing chapter 13; however, it's more commonly used by businesses or individuals who do not meet the qualifications for chapter 13.
Chapter 12 Bankruptcy
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Chapter 12 is a "reorganization" specifically used for farmers and fishermen. This is a rare form of bankruptcy created for those struggling farmers and fishermen in need of serious debt resolution.
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References
- Photo Credit Debt concept - cutting a credit card image by Sophia Winters from Fotolia.com
