ABOUT BANKRUPTCY

It's a major decision. Inform yourself.

If you’re considering bankruptcy you likely feel drained, cornered, and left with no other option.

First of all, keep your head up and stay positive. People have been in this situation before and many will come after you. You are going to be okay. Bankruptcy may very well be your best option. However, due to the loss of control and the long-term impact, bankruptcy should be considered as a last resort. You must set emotion aside and get informed before beginning filing for bankruptcy

High-level information and answers to common questions about bankruptcy can be found below. If you are still uncertain if bankruptcy is your best option please reach out to me.

Before we dive in – If you’re looking for help reviewing what other options may be available you click here to schedule a 15-minute call with a financial coach.

There are two main types of personal(non-business related) bankruptcy: Chapter 7 and Chapter 13

Chapter 7

Used when the filer has little to no assets at all. Nothing of value which could be sold to repay the debt.
Debts that do have an asset can be reaffirmed (resigned). Meaning the filer can keep the asset but must make payments. Else the asset is taken away and the debt zeroed.
Debts are liquidated through a court order.
On Credit history for 7-years
Costs: Typically around $1,500

Chapter 13

Used when the filer has significant assets which can be sold to repay the debt.
A portion of the debt is repaid typically 20-60%. Although if income is high, repayment can be as much as 100%. The court will decide.
A trustee is named by the court.
Debtor and Trustee agree on a repayment schedule. Typically 3-5 years.
Repayment on debt is handled by a court-appointed trustee. Loss of control. Payroll deduction is likely.
On credit history for 10-years
Costs: Typically around $5,000

Debts That Will Not Go Away due to Bankruptcy

Student loans
Child support & alimony
Monies owed to the IRS (Tax debt)
Fines, fees, and restitution ordered due through a court of law, including bills associated with a guilty DUI charge.

What does it mean to reaffirm a debt?
A secured debt (one with an asset backing it like an automobile or home) may be kept through bankruptcy by reaffirming (resigning) for the debt. In a Chapter 13 this means the debt will be included in the payment plan.

If you are still in doubt about what your options are besides bankruptcy and you believe you could benefit from reviewing your situation with a financial coach prior to contacting a bankruptcy attorney you can get started below.

click here to schedule a 15-minute call with a financial coach

Big Finance Goals

Financial Coaching & Credit Repair

ABOUT BANKRUPTCY

It's a major decision. Inform yourself.

Chapter 7

Chapter 13

Debts That Will Not Go Away due to Bankruptcy

Big Finance Goals

Financial Coaching & Credit Repair

ABOUT BANKRUPTCY

It's a major decision. Inform yourself.

Chapter 7

Chapter 13

Debts That Will Not Go Away due to Bankruptcy

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