Have you determined if bankruptcy is a good or bad choice for you?

Once you decided that bankruptcy is a viable option, the next thing to consider is what type of bankruptcy you will file. There are two types of bankruptcies individuals may consider: Chapter 7, and Chapter 13. Get help filing bankruptcy.

**Remember that bankruptcy is going to negative impact your credit. Learn more about the effects of having bad credit.

Chapter 7:
Chapter 7 is the most common filing. It's quick, normally only taking four months from start to finish. It also costs much less than a Chapter 13. Best of all, it solves the financial problem, leaving you in no obligation to pay back your creditors.

Chapter 7 is great for those with a lot of unsecured debts, like credit cards. A chapter 13 forces you repay some of this money owed over a period of several years, whereas a Chapter 7 completely wipes out your debt.

Chapter 7 is also attractive because most states allow debtors to keep all of their property.

Chapter 13:
A chapter 13 is used only in very specific, limited circumstances. It is most often used to save a house from foreclosure. If you are behind on your mortgage, you cannot wipe out that debt in a Chapter 7. If you want to deal with your house debt in bankruptcy and still keep your house, the only way to catch up on your payments is through a Chapter 13 repayment plan.

A  Chapter 13 repayment plan is basically a plan that lasts three to five years, depending on the circumstances. The debtor pays a certain amount of money each month to the Chapter 13 trustee, who, in turn pay back the debtor's creditors. Typically, secured creditors are repaid 100%, and unsecured creditors get pennies on the dollar.

You can get more information about the different types of bankruptcy from Free Advice.

Filing Bankruptcy
Bankruptcy FAQ
Automatic Stays
Importance of Credit After Bankruptcy
Non-Dischargeable Debts



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