Personal bankruptcy is an option you have if you feel your debts have become overwhelming. While you have other options, like negotiating with creditors over your debts or using a payment plan to make installments on your debts over time, a bankruptcy can be a good way to get a fresh start.
If you have high credit card bills or interest rates that are sky-high, starting over post-bankruptcy may be a good option. In the past, the economy was not good and many people got into trouble using credit, losing their jobs and struggling to pay their bills.
Bankruptcy does have some consequences for your credit score, and you should be aware of what it can do to you financially before you choose it. You have two main choices for bankruptcies, Chapters 7 or 13. A Chapter 7 bankruptcy eliminates your debts but requires you to liquidate some of your assets. Some assets are exempted, and some debts can't be eliminated. Debts that can't be eliminated include student loans, child support payments, mortgages and taxes.
Chapter 13 bankruptcy is another option. With this option, you agree to pay down your debts in the next three to five years while on a payment plan. If you think you'll be able to make payments, this can be a good option. It also allows you to keep your assets.
Whatever kind of bankruptcy you're interested in, it's important to review your situation with your attorney. He or she may be able to help you find a better way out of debt or can help you file a claim, so you can get started on a clean financial profile. Our website has more information.