If you are in debt, dealing with collection calls and threats of wage or property garnishments, you understand the stress and anxiety such a situation can cause. Your indebtedness may be through no fault of your own as you may have lost your job or incurred significant medical bills. Bankruptcy is an option available that can help give you a fresh start, eliminate those collection proceedings and get you back on your feet again. However, before filing for bankruptcy, there are some important things that you need to know, such as what is Chapter 7 bankruptcy or what is Chapter 13 bankruptcy. Learn more about the different types of bankruptcy.
What Is Bankruptcy?
Bankruptcy is not something to be taken lightly. It is a federal court process that is designed to help you eliminate debts and, if possible, repay them under the protection of the bankruptcy court.
Bankruptcy is a tool used by debtors to eliminate debt. However, bankruptcy poses a great danger to your property and credit score. You are probably wondering is there any way how to raise my credit score after a bankruptcy case. The following paper seeks to cover the different ways of filing for bankruptcy, the effect of bankruptcy on your property and "how to fix my credit score."
Types of Bankruptcy
Under the Bankruptcy Code of the U.S., you can either file a chapter 7 or a chapter 13 bankruptcy.
Filing for bankruptcy is never easy. Not only does it take a financial toll on you, but it can affect you emotionally as well. During this stressful time, you need the help of a skilled bankruptcy attorney.
An experienced bankruptcy attorney can represent you throughout the process, and they can help you after the discharge. They can provide you with information about how to rebuild your credit after the bankruptcy.
When you are burdened with debts which seem too heavy to repay, any kind of relief that works towards the reduction of the debt amount is always welcome. Debt relief is therefore defined as the rearrangement of a debt in any way or form to offer the indebted person a partial of full relief. This can either be through waiver of penalties, lowering of the interest rates or reducing the principal amount all together. Liquidation refers to the method in which a company is dissolved and its assets given out to cater for its liabilities to creditors and shareholders. Debt relief is mostly sought when a company is going through liquidation or a person is running bankrupt and its main aim is to reduce the amount in terms of liability so as to settle all the claims by the creditors. It is also sought in circumstances when there is an imminent danger of dissolution due to the debt load, and a relief will help ease the debt burden.