by: jenniferquilter
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Date: Tue, 15 Jun 2010 Time: 2:30 PM -
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Contrary to what a lot of people believe there are actually a lot of different options to discharge your debts. This article covers information on the various types of bankruptcy that can be filed and how they will effect your life.
Article Source: DirectoryArticles.com
A chapter 7 is the kind you are most familiar with. This involves discharging most variety of debts and takes about three months to complete. During the application process you will disclose your financial activity over the past few years, your debts, and the property you own. You usually come out of this still owning most of your belongings like your home, vehicle, etc. Luxury items, like vacation real estate, will usually have to be sold to help pay off some of your debts.
Chapters 12 and 13 are designed to help individuals organize their finances. Chapter 12 is specifically designed for owners of family farms while chapter 13 is open to everyone, including farmers, sole proprietors, and independent contractors--but not corporations or LLCs.
This plan lets you file basically all of the same paperwork disclosing your financial activity and such, but other things are very different. It will involve you making a three to five year plan for repaying most of your debt. Things like back child support will need to be paid off completely, and unsecured debt will be paid off with at least 1% of the total, the amount will be determined during the planning process.
In comparison with the chapter 7 option explained above this option involves a lot more legal fees.
Somewhere between 10% to 15% of people who file for chapter 7 are told by a judge to file for chapter 13 instead because they have sufficient income to make a chapter 13 plan work.
All of this information on the various types of bankruptcy that can be filed can be very overwhelming, but the important thing to keep in mind is that you are taking control of your financial situation here, and that is very important so that you can move on.
For information about what your life after bankruptcy will be like and how to go about improving your situation visit Your Credit Score After Bankruptcy.
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