What is Bankruptcy?
Bankruptcy is a legal process that allows individuals or businesses to declare that they are unable to pay their debts. It is often considered as a last resort and can have significant impacts on an individual’s credit report and financial future. There are two primary types of bankruptcy that individuals can consider filing: Chapter 7 and Chapter 13. Deepen your knowledge of the subject by checking out this external resource we’ve specially selected for you. Https://www.helloresolve.Com/, discover supplementary information and fresh perspectives on the topic.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy, also known as “liquidation,” involves the sale of a debtor’s non-exempt assets to pay off their debts. Some property is protected from seizure, such as primary residences, clothing, and household goods. Individuals must pass a “means test” to qualify for Chapter 7, which examines their income and expenses to determine if they are eligible.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy, also known as “reorganization,” involves the creation of a repayment plan over three to five years to pay off the individual’s debts. This type of bankruptcy is often beneficial for individuals who do not qualify for Chapter 7 or who have significant assets that they wish to protect.
How to Decide If Bankruptcy is Right for You
Individuals considering filing for bankruptcy should take the following factors into consideration before making a decision:
Bankruptcy is a serious decision that requires careful consideration. Individuals should seek advice from a qualified bankruptcy attorney and financial advisor before making a decision. By examining their debts, likelihood of repayment, credit score, assets, and emotional factors, individuals can make an informed decision about whether bankruptcy is the right option for them. Find extra information about the subject in this suggested external resource. https://www.helloresolve.com, keep learning!
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