Mainly, there are two key types of bankruptcy. You might have probably already heard of these types of bankruptcy – Chapter 7 and Chapter 13.
Chapter 13
The Chapter 13 basically mean that the court would approve a plan for the person declaring bankruptcy to repay part of or all of their debt over 3 to 5 years. The person gets to keep his/her assets (stuff that they own) and they are given a period of time to bring their mortgage upto date. The person needs to agree to monthly plan for payment and they must follow strict budget that would be monitored by court. The chapter 13 bankrupts would stay on a person’s credit report for a period of seven year, suggests a chapter 13 bankruptcy attorney.
Chapter 7
The Chapter 7 bankruptcy means is when the court sells off all the assets of the person who is declaring bankruptcy – with some exemptions – so that the person could pay back the most debt that he/she possible can. The remaining amount of debt that is unpaid is thereby erased. Keep in mind that bankruptcy wouldn’t clear child support Milwaukee and student loans. One could lose their home (or equity that they have put into it). They can lose their car too, and this depends on what court decides. You could file the Chapter 7 only if the court comes to a decision that your income isn’t enough for you to pay back the debt. Chapter 7 bankruptcy would stay on a person’s credit report for a period of ten years.
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