You're tired of your phone ringing all day, getting hounded by
creditors and your mailbox overflowing with bills you can't pay.
You've decided that bankruptcy might be the solution for you. So,
how does it work?
One of your biggest choices will be whether to file under
Chapter 7 or Chapter 13. Either takes you through bankruptcy,
though the journey will include different stops.
We've created an interactive bankruptcy map to help you
understand and navigate the parallel paths. (
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Chapter 7 vs. Chapter 13
A Chapter 7 bankruptcy eliminates most debt, but some of your
possessions might be sold to pay creditors. In order to qualify for
, you can't make more than the median income in your state and you
can't have too much disposable income. By law, you can discharge
your debts through a Chapter 7 bankruptcy only once every eight
years. In some cases, if too little time has passed since a
previous Chapter 7 discharge, then Chapter 13 bankruptcy might be
bankruptcy, you keep your property and make a court-supervised
agreement to pay off all or part of your debt over three to five
years. Some consumers choose Chapter 13 because they're not
eligible for Chapter 7 or because it makes more sense in their
situation. For example, Chapter 13 allows you to make up missed
mortgage payments and save your house from foreclosure. After you
finish your repayment plan, any remaining eligible debt is
discharged. Some debts, such as back child support, must be paid in
full before you can get a discharge.
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Explore all options before declaring bankruptcy