Bankruptcy should be avoided whenever possible, but there are times when people who are overwhelmed with debt have no viable alternative but to seek bankruptcy relief.
Bankruptcy laws are designed to ease the financial pressure on people who can’t pay their bills. While filing for bankruptcy can erase unsecured debts, prevent foreclosures, and stop debt collection activity, it has some drawbacks, said debt resolution attorney Leslie Tayne. Going through bankruptcy can affect your credit report for up to 10 years, making it difficult to qualify for a mortgage, a car loan, or other lines of credit, Tayne said.
For most individuals, there are two types of bankruptcy: liquidation (Chapter 7) and reorganization (Chapter 13). “There are other chapters of bankruptcy, but for most consumers, these are the two available options,” Tayne said. Depending on individual circumstances, most of your debts may be discharged or reorganized to create a manageable repayment plan… Read More