Money & the Law

Many people fear the stigma of filing for bankruptcy to escape debt. But what if you have no other options?

The two consumer types of bankruptcy are Chapter 13 and Chapter 7. Both types will stay on your record for several years, but if it is necessary, there are some things you should know before filing. Although you may file for bankruptcy pro se, or on your own, hiring a bankruptcy attorney is a really good idea. There are many tiny details and deadlines that will affect the outcome of your case.

Chapter 13 runs for three to five years; it is more of a reorganization of your debts. For instance, if you have a steady income but you’re behind on a house or car payment, Chapter 13 will let some debts be discharged and a payment plan will be set up for others.

In Chapter 13, when you complete all of your payment plans, your bankruptcy will be discharged.

As for how long it lasts on your credit record, typically five to ten years.

Chapter 7 is a shorter bankruptcy. It usually lasts about six months as long as there are no assets a trusty would sell to settle debts. This is true of Chapter 13, as well.

Chapter 7 stays on your credit record for seven to ten years. But if you’re in the process of filing bankruptcy, your credit is probably shot anyway, so that shouldn’t be of great concern.

If you do file for bankruptcy, what happens if you forget to a list a creditor? It does happen, but this is where an attorney will help you. They will give you a list of things you will need to gather and the deadlines on which everything is due. There is more than one deadline in these cases.

Bankruptcy law is complicated. If you need help, consult our Online Legal Directory to find an attorney in your area.

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