With medical bills, mortgages and car payments, expenses can pile up and leave you feeling defeated. If mounting debts are causing stress in your life, you have options.
Filing for bankruptcy offers a fresh start for people in financial distress.
What type to file
Chapter 7 is the most common for personal cases. It is best for people with little assets and low income. It is fast and allows you to move forward without paying your debts. But, the Chapter 7 Trustee may sell off some of your assets.
Higher-income people and those who want to keep their homes may opt for Chapter 13. In this instance, you would come up with a plan to repay your debts over a few years.
How to file
Your legal team will walk you through the entire process. You will complete various forms, and the U.S. Trustee will assign a trustee to your case. You must complete a credit counseling course and attend a meeting with your trustee that your creditors may attend. Depending on the situation, the process can take months. Once completed, you usually will receive a bankruptcy discharge.
How to move forward
There is hope after bankruptcy. Once you have cleared any outstanding payments, you can begin the process of rebuilding your credit. The bankruptcy can remain on your credit report for 7-10 years, depending on your file type. Use that time to raise your credit score and prepare for your next chapter.
Do not let debt ruin your future. Bankruptcy can be a stepping stone to a new beginning.