It is never easy to concede that it might be time to declare bankruptcy. The American dream seems to be open only to people not weighed down with unmanageable personal debts. But this is far from the case. Bankruptcy is supposed to be a fresh start that lets people find their way back to financial health.
How do I choose which kind of personal bankruptcy to consider?
It depends on two major factors. The first is the size and type of debt that is involved. The second is the number and type of assets that a person can commit to settling them.
What is Chapter 7 bankruptcy?
Chapter 7, sometimes called liquidation, is a way for people to settle their debts, at least in part, by turning their remaining assets in to a trustee. This officer then works with creditors to exchange or sell these assets to pay off whatever he or she can.
What is Chapter 13 bankruptcy?
Chapter 13 may be termed reorganization, as it involves a payment plan over a span of time, usually three to five years, while the debtor retains some of his or her assets. This is often a better option than Chapter 7 for people with fewer debts or more assets that they cannot lose without losing their ability to pay debts off.
What help can I get to choose?
An attorney can help guide people facing extreme debt through the process of filing bankruptcy or even finding alternatives to this action. Legal representation also ensures no one has to go through the process of resolving debt alone.