The word “bankruptcy" can instill some fear on some people but there is more to bankruptcy than we actually know. Here"s a great video to give you some idea about it:

  • Can allow people with high debt resolve their financial issues and start over clean.
  • Can stay on your credit report for up to 10 years which can prevent you from getting a loan from the bank.
  • May make it possible for you to get rid of the legal duty to pay some kinds of debt such as medical debt, utility bills and so on.
  • Can temporarily stop certain actions by creditors such as foreclosure on your home, repossession of property and dept collection harassment.
  • Can"t stop you from going into debt in the future.
  • Can"t get rid of debts that are singled out by the bankruptcy law such as child support, alimony and student loans.
  • Automatic stay will take effect upon filing. This prevents creditors from taking any collections action against the debtor.
  • Two most common types: Chapter 7 and Chapter 13.
  • Chapter 7 is straight bankruptcy which involves the selling of all the debtor"s property and the money will be given directly to the creditors.
  • Chapter 13 allows the debtor have a chance to reorganize to pay certain debts over time. The debtor needs to create a bankruptcy plan that will state how he or she will pay off debts.