Facts About Bankruptcy That You Probably Don’t Know

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A Man With Empty PocketsIn 2013 alone, more than 1 million people in the US filed petitions for bankruptcy. The country’s bankruptcy laws provide relief for people who are struggling to get out of their debt. If your borrowing has gotten out of control and you can no longer manage it well, then bankruptcy may be a good option for you.

There are various types of bankruptcies, depending on specific circumstances. Businesses can file for bankruptcy under Chapter 11, while individuals can file under Chapter 7 or Chapter 13. It is important that you make a proper assessment of your particular situation. This way, you can file for bankruptcy in West Valley City under the right chapter.

Here are some facts about bankruptcy and the filing process:

A Judge Will Decide Your Fate

You can file a bankruptcy case in a federal court. A judge makes a decision based on the merits of your specific case. The process of filing for bankruptcy is not as simple as some people may think. It involves more than just filing a document or two. The good news is that bankruptcy laws are almost the same in all states.

Not All Debts Are Discharged Under Chapter 7

Chapter 7 is the most common bankruptcy type for individuals. The process of filing for bankruptcy lasts for about six months. It will stay on your credit reports for as long as 10 years. It’s important to note that Chapter 7 will not wipe out some debts, such as tax deficiencies and student loans.

Your Creditors Can Force You into Bankruptcy

If you have excessive debts, your creditors can file a petition in court to declare you bankrupt. If the judge decides in favor of your creditors, the court may put you under a mandated payment plan.

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While bankruptcy may not wipe out all your debts, it offers a chance to restructure your debts. Your lawyer can walk you through the entire process.