Although filing for bankruptcy can be a difficult decision to make, it is also a solution that will release you from crippling debt. Learn everything you need to know here before you get started.
Written by Rohan Pavuluri.
Updated July 22, 2020
If you’ve been drowning in debt, filing for bankruptcy can be a real legal lifeline. And, the reality is, many Americans are desperately in need of a helping hand when it comes to their finances. When you file for bankruptcy, it is a major step in the right direction toward financial freedom. It not only releases you from the liability of debt, but it also allows you to regain control of your life.
What is Bankruptcy?
Bankruptcy is a solution for those suffering from the burden of debt that cannot be paid in the foreseeable future. It is a court proceeding that can release you from unpaid bills and allow you to have a fresh start. There are three types of bankruptcy.
Chapter 7 Bankruptcy: If you qualify for Chapter 7 bankruptcy, you can be discharged from a variety of debts and/or debts will be revolved by liquidating assets. However, filing for bankruptcy excludes obligations like child support, student loans, or tax debt.
Chapter 11 Bankruptcy: Chapter 11 Bankruptcy involves restructuring the debt. A repayment plan will be created to pay for all loans or other debt that has occurred.
Chapter 13 Bankruptcy: Chapter 13 Bankruptcy is different than Chapter 7 Bankruptcy because it does not completely forgive your debt. It is built for individuals with a steady income. A plan will be developed to pay all or part of the debt. Chapter 13 Bankruptcy can prevent foreclosure or car repossession.
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Who Files for Bankruptcy?
Many people have reasons for declaring bankruptcy from illness to divorce to a job loss, and much more. However, typically an individual or business who has far more debts than money to cover the debt are the ones who file for bankruptcy. If you are someone who is looking for financial freedom, know that you are not alone. Most Americans are suffering from debt and are looking for a way out. And, just like for many individuals, bankruptcy may be the right solution for you.
Should I Declare Bankruptcy?
Deciding if you should file for bankruptcy isn’t an easy yes or no answer. Because it is a big decision to make, it is important to first weigh all of your options. However, a good rule of thumb is if you can’t repay your debt in 5 years, then filing for bankruptcy may be the right option for you. If you are considering declaring bankruptcy, our team at Upsolve can help. We offer a completely free bankruptcy filing tool and access to expert attorneys to low income individuals. And, if you don’t quality for our free services, we can set you up with a paid attorney that will conduct a free consultation to see if filing for bankruptcy is the right option for you. Complete our quick and easy evaluation form to see which of our services you qualify for.