Bankruptcy

What Are The Bankruptcy Options for Consumers?

There are two types of bankruptcy options that you may need to consider when you are in debt, a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy. Bankruptcy should be a last resort as it does long-term damage to your credit report, but there are times when it is definitely called for.

When you file for bankruptcy, you are immediately protected from your creditors. This means they must stop attempting to collect on the debt. Whether they have obtained a judgment, ordered a sheriff’s sale, or have garnished your wages, the court will usually enter an automatic stay. Depending on the outcome of your case, the judgments can be reversed, and the debts reduced or removed.

You will need to fill out a great deal of paperwork when filing bankruptcy, and include your income, expenses, all assets and change of assets within a period of time, and bank statements, usually from the last 6 months. You will need to pass a means test to see whether you qualify for a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy. This is dependent upon your history, your assets, and your earnings.

Note that bankruptcy is a severe mar on your credit report, which will be on there for years to come. However, when you have excessive debt and no option of being able to repay, it may well be the best debt elimination service or debt reduction service available.