Nobody wants to file for bankruptcy but if you are considering it there are a few things you need to know before you take the plunge. If you see yourself as having no other alternative this guide will attempt to answer a few of the most commonly asked questions about the decision to file for bankruptcy.
Please note that since bankruptcy laws vary from state to state all applicable aspects could not be covered here. See an attorney for information specific to where you live.
What is Bankruptcy?
This is a legal method used to discharge debts that cannot be met. In a sense it is a way of wiping the slate clean but there are pros and cons to a choice like this so consider them well before deciding.
Many influential companies have used bankruptcy laws to sort out their debt problems and the process is the same for the individual. The debt you have incurred may be of any amount. In fact the only requirement that needs to be met to file for bankruptcy is that you have debts.
Types of Bankruptcy
There are two types of bankruptcy that apply to individuals (with the exception of farmers) and they are:
Chapter 7 (liquidation) and
Chapter 13 (adjustment of debt of an individual with regular income)
