TYPES OF BANKRUPTCY  

There are two types of bankruptcy commonly used by individuals.  These are Chapter 7 and Chapter 13. Filing bankruptcy will stop the creditors harassment.  It forces the creditors to work within the bankruptcy legal system.  It is important that you know your rights as many collectors give you false information.

Chapter 7 is a personal bankruptcy which helps clear up unsecured debt. For example, unsecured debt is certain credit cards, medical bills, utility bills, old rent payments, pay day loans, personal loans, deficiencies from foreclosed homes or repossessed vehicles.  The Chapter 7 bankruptcy will discharge or wipe away existing unsecured debt and allow you to have a fresh start.  It is important to talk with a legal representative who is familiar with the bankruptcy process. When you file Chapter 7 bankruptcy, you do put property at risk.  It is important to review any problems in your case with an attorney. 

In most cases, Chapter 13 will stop a foreclosure or a repossession.  This type of bankruptcy protects your assets and puts you into a payment plan in order to get caught up on the unpaid debts. The payment plan lasts between three to five years.  This will allow you to get caught up on the payments you are behind on in your mortgages, taxes, car payments, child support and many other types of debts. It is not true in most cases that you will have to repay all your debts. Each case is different and many persons in a Chapter 13 will still wipe out or discharge their unsecured debt without any or only a portion of the debt.