Any time someone has a lot of debt or is falling behind on their bills, filing for bankruptcy is an option. Filling for bankruptcy is a way to get out of debt through a plan set by the court. There are a couple of different types of bankruptcy that you can choose from and they all have different benefits.
Chapter seven bankruptcy is one of the options that you can choose from. In this option, the bank will sell your assets to pay your debts. Chapter seven bankruptcy will stay on your credit for ten years after you file, which can make it difficult to build back your credit.
Another form of bankruptcy is chapter 13. In chapter 13 bankruptcy a creditor will pay for all of the debt and you will create a plan with the creditor to pay back the debt. The plan is the most important part and you must be making payments with this plan.
Finally, chapter 11 bankruptcy is the last option that we are going to talk about. This is the form of bankruptcy that is most commonly used by businesses. Although there are a few options chapter seven bankruptcy is the most common option that we see used.