Everyone has heard of bankruptcy but not many people actually experienced it. Which is a good thing? Bankruptcy is usually that extreme situation where’s someone or a business cannot pay any of their outstanding debts. It’s one of those things that can really affect somebody moving forward in life. It’ll be hard to get any type of credit loans simply because bankruptcy weighs heavily on your credit report. This is something that actually stays on your report for about 10 years, so it’s not something that you should take lightly. Before you even think about filing for bankruptcy, there many different things you should consider and how they can affect you in the long run.

Although bankruptcy is there to help someone get a second chance in life so you don’t have all these that are following you. Which is great but the reality is once you file for bankruptcy it’s reflected on your credit report, and once that happens it’ll be much harder for you to get a mortgage, car loan or even any type of loans in general.

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How to File for Bankruptcy

Before you even consider filing for bankruptcy we strongly recommend that you take the time to assess your current situation. There are many different questions you should ask yourself to determine whether or not bankruptcies right for you. Here are a few things you should ask yourself moving forward.

  • How long will it take you to pay off your debts?
  • Are you unable to make the payments?
  • Are you able to deal with any variables that come with bankruptcy?

These are some key questions that many people recommend you ask yourself before you even think about filing for bankruptcy. Now if you’re unable to do anything on those questions above, maybe you should consider it. If you’re not able to pay your debts within the first 5 years, or if you have no legitimate way of making payments towards your debts. It can be a scary future ahead.

Before you are able to file bankruptcy there are certain procedures that you need to do? In the United States if you believe that if you should file for bankruptcy before anything else will have to go before anything else you’ll have to go through some credit counselling courses. Once you’ve completed all of that someone will review all the silence that you have completed and ensure that there is no fraud that has been committed. Then the process continues on.

Types of Bankruptcy

Bankruptcy isn’t just bankruptcy, it sounds kind of weird but there are many different types of bankruptcies. Chances are if you file for bankruptcy is you’ll be falling under one of these categories. There are different types of bankruptcies that cover many different aspects for individuals and businesses. Depending on the type of bankruptcy that you are filing, you’ll fall under one of these categories. Specifically, regarding a personal credit score, you’d be looking at chapter 13 a chapter 7 bankruptcies. We’re getting more detail on these bankruptcies and what they exactly mean on your credit report.

Chapter 7. Your assets are taken and sold to repay creditors. If there is an instance where you prefer not to have any assets taken such as your home or car, this may not be the right fit for you. For more information regarding Chapter 7 bankruptcies click here.

Chapter 13This is for anyone who is looking to keep their assets and not have it taken to pay off any debt. For more information regarding Chapter 13 bankruptcies click here.

We tried to give you as much information you need to understand bankruptcy. We know it’s a scary topic to cover, and especially if you’ve ever filed for bankruptcy you may want to know how you can have it removed off your credit report. There are many different tactics you can take and we’ve written about it already so check it out here. But if you’re new and having issues with debt and are afraid for your credit score filing for bankruptcy may not be the worst thing ever. With the right information and professional help throwing in the towel might be the right step for you. But before you take the leap definitely check out our credit repair services to see how we can help you.