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There are two types of
bankruptcy, Chapter 7 and Chapter 13.
Filing for a Chapter 7 bankruptcy means you are asking the
courts to completely discharge your debts.
Filing for a Chapter 13 bankruptcy is when you set up a court-
approved plan to repay your debts.
Bankruptcy can negatively impact your credit history for as much as ten years.
Bankruptcy also can be reported for life if you apply for a job, loan, or life
insurance; it is not the "quick fix" it is advertised to be.
Your debt might dissolve overnight, but the emotional effects can last a
lifetime. The limitations and embarrassment caused by declaring bankruptcy is
rarely worth it. It is difficult to predict what opportunities you may be denied
because of a damaged credit rating, for example, the purchase of a home or a
business.
The Chapter 7 bankruptcy filing takes approximately 3 to 6 months. When filing
you must disclose the following personal information to the courts:
1. Property and income
2. Debts and living expenses
3. Property you claim to be exempt
4. Property transactions for the two years prior to filing
When filing a Chapter 13 bankruptcy you commit to partially paying off your
creditors over a 3 to 5 year period, but the bankruptcy may remain on your
credit report for up to 10 years after you make your last payment, ruining the
chance for you to get credit and loans.
These "easy answers" are not the best solution to getting out of debt and back
on track. Today, society looks for the "quick fix" and these options are
promoted as immediate help, but the effects can last for years.
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