If you are having financial troubles due to excessive amounts of debt, you may be considering the option of bankruptcy like thousands of other Americans. I would like to take this opportunity to explain in a simple, basic way a legal term that might have you a little confused.
When speaking of bankruptcy, there are a number of different options, although when dealing with personal debt the majority of the time one only refers to two specific cases: Chapter 7 and Chapter 13. For purposes of brevity, I am only going to explain these two types of bankruptcy.
Chapter 7 is more or less a 100% restart. A judge will completely erase all of your debt. While this may seem positive, the process is much more complete. The judge may decide that you should sell off personal belongs in order to pay something back to your creditors. You may not have the option to retain any property, etc that may be of value. Chapter 7 could be considered an almost complete liquidation of your assets.
Chapter 13 is not quite as drastic as Chapter 7. Chapter 13 requires you to organize a court-approved payment structure to pay back your debts. The plan is organized over a 3-5 year period and requires you to pay back about 30-50% of your debt depending on the judge’s ruling. This type of Bankruptcy will allow you to retain some types of personal property.
Please keep one thing in mind, since the Bankruptcy reform laws of October 2005, it has become more difficult to file fore bankruptcy. In order to file, you must present yourself before a judge who decides if you are applicable based on your income and your current situation.
If you are seriously considering bankruptcy, please take the time to speak with a financial expert. He or she may be able to help you understand your option more completely and help you avoid making a mistake you might later regret.
Scott Wallitsch is a financial consultant for DebtorSolution. To find out more about Bankruptcy Help, visit our website or email us at Info@DebtorSolution.com
Article Source: http://EzineArticles.com/?expert=Scott_Wallitsch
