Types Of Bankruptcy

There are two different types of bankruptcy that can be used in most cases. Each one has a different set of rules and guidelines that you must follow in order to qualify for and get the bankruptcy. If you are considering bankruptcy, it is important to understand the differences in these types of bankruptcy and to choose the one that best fits your needs and the one that you qualify for.

Chapter 7 Bankruptcy

This is the type of bankruptcy that is most often used by individual debtors. It allows for an individual or married couple to wipe out their debt by taking property and liquidating it. The money from the property is then used to pay off the debt that the individual has incurred. In some states, certain property can be retained. Only property that is exempt under the bankruptcy laws is eligible. In most cases, it will be cars and homes that are in good standing with their creditors. In some states, you will lose your home. This is the fastest way to get out of debt but one that is going to wipe you clean of assets.

Chapter 13 Bankruptcy

In this type of bankruptcy, the debtor and creditor work out a plan that allows the debtor to pay off their debt in a payment plan. Most of the time, this process will happen through the paycheck of the individual. As long as the payment plan is in effect, the creditor will not take your home or possessions and you will not lose them. It is a good thing for those creditors that would have lost more if a Chapter 7 were filled and a good thing for the debtor because they can work on improving their overall credit.

Determining which type of bankruptcy is the right choice for you is difficult. If you can afford to pay off the debt through a Chapter 13, it is likely to do the least amount of damage to your credit. A Chapter 7 will remain on your credit report for up to ten years. Nonetheless, it is wise to talk to your attorney about which type of bankruptcy is the right choice for your needs.

About the Author

Ken Austin is the webmaster at ">http://bankruptcy.creditreliefonline.com/">http://bankruptcy.creditreliefonline.com/ . To learn more about different ">http://bankruptcy.creditreliefonline.com/"> types of bankruptcy and bankruptcy options, please visit the bankruptcy">http://bankruptcy.creditreliefonline.com/">bankruptcy resource guide

Ken Austin

florida bankruptcy

Each year, millions of people file bankruptcy as a means of erasing their consumer debts. While this approach may relieve stress, a bankruptcy is damaging, and will hang over your head for the next ten years. Still, it is possible to overcome bankruptcy. The key is making smarter financial and credit decisions. With this said, some people choose to purchase a home after a bankruptcy. Here are a few pointers to consider when buying a home. Reasons to Delay the Buying Process after Bankruptcy If you consult with mortgage or financial experts, they will likely discourage you from buying a home following a bankruptcy. After your bankruptcy is discharged, there is
Click here to read more from this article ...

Congress recently passed the most sweeping bankruptcy legislation in more than twenty five years. The Bankruptcy Abuse prevention and Consumer Protection Act was written to make it harder for most personal bankruptcy filers to have their debt swept away through a Chapter 7 filing. The new law will require that potential bankruptcy filers pass a "means test" and most will not qualify for the Chapter 7 filing. Instead, they will have to file under Chapter 13, which requires a court-defined repayment schedule of up to five years. This legislation, considered by its detractors to be a "wet, sloppy kiss" to the credit card companies, has many people justifiably concerned
Click here to read more from this article ...