If you are considering filing for bankruptcy, there are two types that may be available to you. It’s also important to know that there are some debts that may not be dischargeable in bankruptcy
Chapter 7 and Chapter 13
Chapter 7 bankruptcy is also called a liquidation bankruptcy and you may consider it if you are looking to resolve your debt quickly and have limited assets. It involves selling your non-exempt assets to pay creditors. Also, certain debts may be discharged meaning you are not responsible for them. While these can vary depending on your circumstances, they may include medical bills and credit card debt.
Chapter 13 bankruptcy is also known as a reorganization. With this type, you are required to follow a repayment plan to pay all or some of the debt over time, usually within three to five years. It works best if you have a regular income and want to retain your assets.
Not all debts are dischargeable if you file for bankruptcy. If you owe child support, spousal support or tax debts, those are usually not dischargeable, and neither are student loans unless you can prove undue hardship which can be very difficult to do.
If you were involved in a criminal case and owe fines, restitution or debt incurred because of fraudulent activities, those also may not be discharged. It’s also important to know that if you take certain loans or advances of funds within a certain period of time before filing for bankruptcy, those may also not qualify.