If you owe too much money to lenders that you cannot pay, your credit will be affected quickly. You may also be taken to court by some creditors if you cannot pay your bill. One option you to help with this problem is bankruptcy. Below is information about two types of bankruptcies so you can decide what would work best for you.
Chapter 13 Bankruptcy
With a chapter 13 bankruptcy, you set up a plan to pay off your creditors. This will allow you to have longer terms to pay off what you owe. This is beneficial if you do not want the loans wiped out but would feel much better about paying them back. Some creditors will work with you to determine a new loan. For example, the creditors may offer to lower what you owe to help you pay things back. This may not be a lot of money, but anything can help.
In some types of debt, you would lose your home, car, and other assets in order to pay off what you owe. With a Chapter 13 bankruptcy, however, you do not have to worry about losing any of your assets if you pay your creditors back what you owe.
You will find that it can be much more difficult to file for a Chapter 13 bankruptcy than other types. This is because you have to be relied on to make payments to your creditors each month.
Chapter 7 Bankruptcy
Another type of bankruptcy available is a Chapter 7 bankruptcy. This is also known as a liquidation bankruptcy. You will need to have a Chapter 7 trustee appointed to you, which is done by the court. This trustee will manage your case.
With a Chapter 7 bankruptcy, you will not have to pay your creditors back. Instead, your trustee will gather and sell all your non-exempt assets and then use the money from the assets to pay off your creditors. You may lose your home, car, etc., but you will be completely debt-free and will be able to start over again.
Because you do not have to pay the creditors back on your own, a Chapter 7 bankruptcy is much easier to get.
If you think bankruptcy would be right for you, you need to hire a bankruptcy attorney, like those at Molleur Law Office, to help you. This attorney can go over the two types of bankruptcies with you in much more detail to help you determine what would work best for your situation.