Debt can be extremely overwhelming; however, declaring bankruptcy may be your best option.  Bankruptcy is a drastic alternative because it will have a negative impact on your credit report for 10 years.  Obtaining new credit will be a challenge, it could effect future employment, renting a living space, etc. 

However, for many people bankruptcy offers a second chance and a way to get their life back on track.  If you are considering bankruptcy it is imperative that you seek the help of a qualified bankruptcy attorney. 

If you are looking for a certified attorney in your area click here.

Types of Bankruptcy:

Chapter 7 Bankruptcy: This is commonly known as “straight” bankruptcy. Chapter 7 is only for individuals, not businesses or partnerships. In most cases, all of your personal property is exempted and kept out of the bankruptcy. Most people file for Chapter 7 when they are looking to completely eliminate large credit card debt, personal loans and other unsecured debt.

Chapter 11 Bankruptcy: When a business is in financial trouble and is unable to pay its debts to its creditors, they can file for Chapter 11. A Chapter 11 filing means that the business will continue to operate while a bankruptcy court supervises the “reorganization” of the company’s contractual and debt obligations.

Chapter 13 Bankruptcy: This is commonly used for people who have too much disposable income and also have some kind of consumer debt like, student loans, or taxes. Chapter 13 allows a person to set up a 3-5 year repayment plan to help make up past due payments, bringing their accounts back to normal.

Declaring bankruptcy will remain on your credit report for 10 years. As of October 17, 2005 you must get credit counseling from a government approved organization within six months before you file for bankruptcy protection. 

Always seek the help of a qualified bankruptcy attorney when considering this option.