Different Types Of Bankruptcy
Dealing with bankruptcy is an incredibly difficult process and the outlook for your financial future is very dire regardless of what level of bankruptcy you actually file for. Many people believe that bankruptcy itself is just one umbrella term however there are actually different elements to it, some better than others and some that actually allow you to find the means to come out of it.
Straight bankruptcy is the worst kind. Essentially this means that you are defaulting on all your debts, have no means in which to pay them back and do not look like doing so for the foreseeable future; what will happen here is that you assets such as your home or your car will be repossessed and sold off to try and service some of the debts that you have created. Your long term credit score and financial outlook here are very poor and it should really be used as a last resort for many people. An alternative does exist however.
Chapter 13 bankruptcy works in the same way that a company would go into administration. Basically you are asking the companies that you owe money to to re-service your debts and create a new repayment plan that you can actually afford or risk going into straight and complete bankruptcy and them not getting much, if anything, at all. Under this scheme you will get the chance to extend the repayment plan and also prevent a creditor from calling in your whole debt at once. This is a great option for those that have a steady income but have let their debts and payments get out of control and allows them the opportunity to create a totally new repayment plan and also be able to pay off their debts and get on a much better financial footing.