Are you in debt? Is your debt caused by medical bills, late fees or maxed credit cards? Is your debt causing financial strain? You may need to consider filing for bankruptcy. Bankruptcy is a process that can help you remove large amounts of debt within a few months or years.
You may be eligible for Chapter 7 or Chapter 13 bankruptcy. However, you should learn about the difference between these two forms of bankruptcy before you file. Here is what you should know:
What to know about Chapter 7 bankruptcy
Chapter 7 bankruptcy can wipe away most of your debts in a few months. However, this form of bankruptcy is only eligible for low-income families. This means that people who make below the average income in their community can file for Chapter 7 bankruptcy.
Furthermore, Chapter 7 bankruptcy is also called liquidation bankruptcy. Assets may be used to resolve debts. However, most assets are considered exempt from the liquidation process, including a family home or a single vehicle.
What to know about Chapter 13 bankruptcy
Alternatively, you may want to consider a Chapter 13 bankruptcy if you can pay off some of your debts. Chapter 13 bankruptcy reorganizes debts so that they can be paid off in three or five years. If there are any remaining debts after this repayment period, they may be resolved. This form of bankruptcy is eligible for people who make more than the average family in their community.
Before committing to a form of bankruptcy, you may need to seek professional legal guidance to help you choose the right form of bankruptcy.