It goes without saying that no one wants to go through bankruptcy. Bankruptcy feels, to some, like a loss. It’s important for you to understand that bankruptcy isn’t a sign of poor money management or failure. It’s just a sign that you need financial help.
It’s essential to stop worrying and to start putting a plan into action. With Chapter 7, 13 or 11 bankruptcies as options, there is sure to be one that can help you resolve your financial issues.
Why should you choose bankruptcy?
It’s a good idea to choose bankruptcy if you cannot see a way to pay back what you owe or if you’re “treading water” by paying only minimums on your debts. When your debts match or exceed your income and you cannot find a way to reduce them, bankruptcy may be the best option.
Each type of bankruptcy is different. Chapter 7 liquidates assets to repay creditors, but it largely eliminates debts. Chapter 13 bankruptcy lets you repay what you owe over a period of three to five years, and remaining qualified debts are discharged. Chapter 11 helps business owners and some consumers restructure their debts, so they can come out stronger.
Is bankruptcy costly?
In terms of the fees you’ll pay, most bankruptcies start at around $1,000. However, those fees may be able to be paid in installments, which can help you get started on a bankruptcy while still affording to cover the costs associated with it.
Our website has more on bankruptcy and why it’s a good idea to speak with someone about your options if you’re struggling with debt.
