Types of Bankruptcy
The most common type of bankruptcy is called Chapter 7. This filing allows eligible individuals to have certain types of debt discharged. With Chapter 13 bankruptcy, individuals can reorganize their debt to make the monthly bills more affordable.
Dischargeable Debts
Unsecured debts can usually be wiped out with bankruptcy. This includes unpaid credit cards, medical debts, consumer loans and other types of debt that is not secured with collateral such as a car or home. Student loan debts and some types of tax debt cannot be discharged. If you want to keep your home or other property in bankruptcy, you must own it outright or make a plan to become current on and continue to repay the loan.
Impact on Credit
Chapter 7 and Chapter 13 bankruptcy filings will remain on your credit report for up to 10 years. This can make it difficult to qualify for mortgages, new credit cards and other types of loans. An experienced bankruptcy attorney can help determine if you can qualify for bankruptcy and if it is the right route to take in your financial situation.