\u201cBankruptcy:\u201d The word no one wants to hear in relation to their finances. But here\u2019s the thing: Personal bankruptcy is a good thing, because it gives you a way out when no others are available. <\/p>\n\n\n\n
This guide will give you the bankruptcy basics you need to know, help you understand the process and discuss when it might be the right option for you.<\/p>\n\n\n\n
At its most basic, bankruptcy is a legal process designed to help people in tough financial situations.<\/p>\n\n\n\n
Bankruptcy can help you deal with debts you can\u2019t pay, and halts collection efforts and most legal actions while the case is active. It\u2019s a structured way of clearing or repaying debt that factors in the assets you already have. The goal is relief for the borrower (and the potential of partial repayment for the lender). <\/p>\n\n\n\n
But keep in mind: Bankruptcy cannot erase all types of debt, or fix your financial situation quickly. There are two main types of personal bankruptcy that fit different situations. <\/p>\n\n\n\n
During chapter 7 bankruptcy,<\/a> most of your debts are discharged using the assets currently at your disposal. This process, called \u201cdischarge,\u201d is the faster of the two personal bankruptcy methods. But bear in mind that not all people are eligible to file chapter 7 bankruptcy, and some may not want to because of the value of their assets or their credit needs<\/a>.\u00a0<\/p>\n\n\n\n Chapter 13 bankruptcy<\/a> allows you to keep your property while you follow a 3- 5 year court-approved repayment plan. After the plan ends, remaining eligible debts may be discharged. But in order to qualify, chapter 13 (sometimes called the \u201cwage earner\u2019s plan) requires a steady income.<\/p>\n\n\n\n In either case, consult with a financial professional and bankruptcy lawyer before moving ahead. <\/p>\n\n\n\n Bankruptcy can wipe out many kinds of unsecured debt, including credit cards, medical bills and personal loans. But some debts cannot be cleared, even through personal bankruptcy. These include child support payments, alimony, student loans, tax bills and court fines. <\/p>\n\n\n\n But for all its benefits, the mark of bankruptcy can impact your ability to use credit in the long-term. Among other things, bankruptcy can stay on your credit report for up to 10 years, make getting approved for new lines of credit more difficult and even impact your employment in some industries. <\/p>\n\n\n\n Personal bankruptcy isn\u2019t a quick fix: It\u2019s a legal process with effects that can change your financial path for years. But for those who\u2019ve fallen behind on payments, have too many bills or feel like they\u2019ll never get out from under their debts, personal bankruptcy is a lifeline. <\/p>\n\n\n\n Bankruptcy\u2019s not for everyone. And it\u2019s also smart to do more research into your options. Accredited Debt Relief should be among them: Our program can slash your eligible monthly payments on unsecured debt by 40% or more, helping you regain control over your finances.<\/p>\n\n\n\nChapter 13: A Payment Plan Over Time<\/h3>\n\n\n\n
Personal Bankruptcy, Step-by-Step<\/h3>\n\n\n\n
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What Happens When You File?<\/h2>\n\n\n\n
When to Consider Bankruptcy<\/h2>\n\n\n\n
Want to learn more? Our experts can help.<\/h3>\n\n\n