Coming to terms that you need to file for bankruptcy is the first step in securing your financial freedom. You and more than 700,000 other people make this same important decision every year. But now that you’ve made this decision to file for bankruptcy, what comes next?
The next choice you need to make
You may be surprised to learn that there are two primary types of consumer bankruptcy that you need to choose from: Chapter 7 and Chapter 13. Each of these options offers a unique method of discharging unsecured debt.
Chapter 7 bankruptcy is likely the form of bankruptcy that most people think of. If you qualify for this option, the trustee could sell any nonessential assets, such as a secondary home or vehicle, heirlooms, or collectibles. The money from these assets will go to paying off your debt, and then Chapter 7 bankruptcy will usually discharge anything that remains afterward.
Chapter 13 bankruptcy allows you to keep your assets by establishing a payment plan to pay off your debt. This plan typically lasts between three to five years, and if you make all of your monthly payments on time during this period, chapter 13 bankruptcy will usually discharge any debt that remains after all of your payments.
Consult with an attorney
It may seem difficult to decide which bankruptcy option is right for you, but thankfully you do not have to decide on your own. An experienced bankruptcy attorney can help you weigh your options and determine what form of bankruptcy best suits your unique needs. Once you have made your decision, they can help you take the next steps toward financial freedom.