1. There are Different Types of Bankruptcy Individuals May Choose to File
Chapter 7 bankruptcy is most often filed by individuals looking to get their debts discharged. Once a petition for Chapter 7 bankruptcy has been filed, creditors may no longer pursue actions against the debtor for collection of the debt.
Chapter 13 bankruptcy is used by individuals during a time of financial crises, usually to prevent foreclosure on their property. Chapter 13 bankruptcy is similar to a debt relief payment plan and requires the debtor to pay back all or part of his or her debts over several years depending on the amount of the debt, and the debtors ability to pay the debts back.
2. Chapter 7 Bankruptcy May Stay On Your Credit For Ten Years
Chapter 7 bankruptcy may stay on your credit for ten years. Similarly, Chapter 13 bankruptcy can stay on your credit for 10 years, but may be removed after seven years.
3. Bankruptcy Does Not Forgive All of Your Debts
Just because you file for bankruptcy does not mean that all of our debts will magically disappear. The types of debts that will not be cleared include the following:
- Student loans
- Child support
4. You Must Get Consumer Credit Counseling Before Filing For Bankruptcy
Before filing for bankruptcy you must get credit counseling. The credit counseling must be from a government-approved credit counseling organization. The credit counseling will help you evaluate the alternatives to bankruptcy as well as the consequences of bankruptcy.
Hope this information was helpful!
Keep in mind, if you are experiencing financial difficulties and want to file for bankruptcy, there are many hurdles you must first overcome. You may want to consider hiring a Bankruptcy Attorney to guide you through this stressful and time-consuming process. A Bankruptcy Attorney will help you eliminate credit card debt, unsecured debt, and creditor harassment.
Click to find an experienced Bankruptcy Attorney in your area today!
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