If you, like so many others, view bankruptcy in a negative light, it’s time for you to look more closely at what the process can actually do for you. While many associate it with financial instability, bankruptcy is actually an opportunity to eliminate debt and start fresh. Explore your debt-solving options in this light, and you’ll have a much easier time taking that first step out of financial frustration and into a place of security.
Is Bankruptcy Right for Me?
Asking this question is a great place to start. After all, bankruptcy is just one of many possibilities for clearing the debt out of your life. In order to determine whether it’s the best option for you, consider these crucial pieces of information:
Chapter 7 Bankruptcy
Chapter 7 is known as the "debt discharge" bankruptcy. This process, which can be completed in just a few months, involves wiping out most or all of your debt all at once. This is a popular option for people facing credit card debt, medical bills, student loans, tax penalties, and similar debts.
Chapter 13 Bankruptcy
Whereas Chapter 7 is all about eliminating as much debt at once as possible, Chapter 13 is a useful tool for repaying your loans in order to hold onto things that are important for you. For instance, if you have substantial home equity (or no equity), if you’re behind on car payments, or you owe child support, setting up a Chapter 13 repayment plan can help you keep what’s important (like your home, car, and visitation rights).
Alternatives to Bankruptcy
If neither Chapter 7 or Chapter 13 seems right for your circumstance, there are a number of debt settlement agreements you and your attorney can explore. This is an option that makes sense for many debtors because it can allow them to find debt relief while preventing the stain of bankruptcy on their credit record.