Welcome to Bankruptcy America’s Bankruptcy pages, your third step in exploring alternatives to bankruptcy! Here, you can:
What is Bankruptcy?
Bankruptcy is a way for people or businesses who have more debts than they can handle, either to work out a plan to repay the money they owe over time, or to eliminate their debts entirely.
A plan to repay some or all of the money owed over a period of time is called a Chapter 13 plan (for individuals – the chapter numbers differ for farmers and corporations, and are taken from the sections of the Bankruptcy Code that describe these procedures).
If payments cannot be paid over time, an individual or a corporation can file a bankruptcy under Chapter 7, where assets are liquidated and most debts are discharged.
Chapter 13 bankruptcy makes it hard to get credit again. But after a Chapter 7 bankruptcy, it will be even harder to rebuild your credit, so you should consider Chapter 13 first.
To start this step, learn whether you may qualify for a Chapter 7 bankruptcy.
If your situation indicates that you may qualify, learn more about Chapter 7 bankruptcy here.
If your situation indicates that you will not qualify for a Chapter 7 bankruptcy, you can explore Chapter 13 bankruptcy.
Whichever chapter you choose, note these key facts:
- It will help if you learn more about bankruptcy.
- Bankruptcy is complicated, with local variations in the laws. It is important to consult a bankruptcy lawyer before you file.
- Before you file for bankruptcy, and again before your Chapter 13 bankruptcy is finally discharged, you must obtain credit counseling from a non-profit credit counseling agency registered under the federal bankruptcy reform of 2005.
At any time, you also have the option to submit your question to an expert on personal financial problems in your region, and receive a reply in confidence.