Bankruptcy allows you, the debtor, the opportunity to repay your debt, or eliminate it altogether with the protection of the bankruptcy court. A bankruptcy basically allows a consumer or wage earner to liquidate or reorganize debt.
Types of Bankruptcies
Chapter Seven, Nine, 11, 12, 13 and 15 are the types of bankruptcies available. Each chapter has its own rules. For instance, filing Chapter 13 allows you to keep your property and repay your debts over a period of time.
Eiligibility
In order to qualify for any type of bankruptcy, you must take the means test. This test identifies your eligibility for filing bankruptcy.
Benefits
The benefits of bankruptcy are to restore your personal or your business's credit. Filing bankruptcy generally stops creditors from harassing you, garnishing your wages and filing liens against your property.
Time Frame
The type of bankruptcy you file determines the time frame in which your bankruptcy is discharged. For instance, a Chapter Seven bankruptcy generally takes three to six months to discharge.
Warning
Filing bankruptcy does not mean you can start running up your credit again. To keep individuals from abusing bankruptcy, the government limits your ability to file again.
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