If you have to file bankruptcy and want to know what your best option is in terms of what type of bankruptcy you have to file then you'll want to inquire about Chapter 7. Under the Bankruptcy Abuse Prevention and Consumer Protection Act passed in 2005, it is much more difficult to qualify for Chapter 7 bankruptcy as the federal government is trying to funnel the majority of bankruptcy cases into Chapter 13 which needs repayment.
The Advantages of Chapter 7 Bankruptcy
The lately passed laws aim at making bankruptcy as less attractive of an action as possible and limiting Chapter 7 cases plays a large part. If you are eligible for and file Chapter 7 bankruptcy then you're technically not required to pay off some of our outstanding debts. Your nonexempt belongings (if you have any) are liquidized and the assets are given as payment to your lenders. Any unpaid debts, with a few notable exceptions, are discharged and you're permitted to keep your exempt belongings and start over.
Some of the notable exceptions to dischargeable debts after your Chapter 7 bankruptcy are:
--Student loans
--Alimony/child support
--Taxes
--Proceeds from a fraudulent or criminal activity
There are a few more non-dischargeable debts and the number and extent vary from state to state but the proof is in the pudding: if you are eligible for Chapter 7 bankruptcy then it's probably your best option.
Learn More About Chapter 7 Bankruptcy
You'll want to speak to a bankruptcy lawyer about whether or not you can file Chapter 7. They will tell you about the "means test" and whether or not you qualify for protection under Chapter 7. That way you can get an idea of where you are at and where you're going so you could get to a debt free destination as rapid as possible.
