For anyone going through the difficult process of being bankrupt, the last thing you want is to be caught in even a worse financial situation than you started, which is why you need to know what you can expect to get through filing bankruptcy.

Going through Bankruptcy

In case you were still wondering as to what it is, then you’ve come to the right place. Bankruptcy discharge means that you can be forgiven for most of the debts that you owe to creditors. The one thing you have to take note of is that, although this is a step in the right direction, you have to do a lot more before being considered for bankruptcy.

Types of Bankruptcy:

Chapter 7 Liquidation
This type of bankruptcy filing means that the debtor does not have to pay anything to his or her creditors. Any assets that the debtor has, such as a home, a car, property, or anything that can be sold for money will be liquidated by the trustee. These proceedings will be handled by the trustee in accordance with federal and federal laws. At this point, you will not have to deal with your creditors anymore. The discharge will take place within three to six months of filing.

Chapter 13 Reorganization
This type of bankruptcy filing means that you and your creditors will be made to come up with a repayment plan in which you will be forced to pay back your debts in three to five years. You will be asked to keep your essential assets. This is actually a better alternative as it is more practical for a debtor to follow.

Chapter 11 Large Reorganization
This type of bankruptcy filing means that you have a plan with the creditors to pay them back. You will be given the reorganization plan that will help you pay back your debts and respect your financial position better, which they will take into consideration.

If you are willing to follow through with your debts, filing for bankruptcy is the correct thing to do. Once you do, you will be given a fresh start and will no longer be bothered by the creditors. Your credit rating will also be protected to some extent, thanks to the timely payments. Ultimately, your credit rating will improve, as you will not be dealing with the harassment anymore.

Also read about cheap financial services and late payments in my blog. Good luck!