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Filing Bankruptcy
There are two main types of bankruptcy available in the USA for people who find themselves unable to meet their financial obligations, and it is important to know about them both before making the decision to file for bankruptcy.
Chapter 7 Bankrupsy
The first type is called “Chapter 7 Bankruptcy“. A debtor who successfully files Chapter 7 bankruptcy will have all unsecured debts eliminated. Unsecured debts are things like credit cards or personal loans that are not secured by personal property.
Bankruptcy Lawyers
Although these debts are discharged in a Chapter 7 filing, it is not a painless process or an easy method of eliminating debt. Most of your assets that have any value can potentially be sold off to help recoup the losses that your creditors have sustained. Also, your credit report will be negatively affected by a chapter 7 bankruptcy for anywhere between 7 to 10 years.
This means that any time you attempt to open a credit card or take out a loan, your credit report will reveal to the lenders that you have filed bankruptcy in the past. This will inevitably lead to much higher interest rates and an increased level of loan rejections.