Bankruptcy Basics

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What is bankruptcy?

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Bankruptcy is a legal process for individuals or businesses unable to repay their debts, providing relief from some or all of their debts.

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What are the different types of personal bankruptcy?

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Chapter 7, Chapter 13

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What is the means test in bankruptcy?

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Calculation used to determine if a debtor's income qualifies for Chapter 7 bankruptcy.

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What is Chapter 7 bankruptcy?

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Chapter 7 bankruptcy is a legal process that allows individuals and businesses to eliminate most of their debts by liquidating assets.

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What is Chapter 13 bankruptcy?

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Chapter 13 bankruptcy is a legal process that allows individuals with a regular income to develop a plan to repay all or part of their debts.

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What is the difference between Chapter 7 and Chapter 13 bankruptcy?

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Chapter 7 involves liquidating assets, Chapter 13 involves a repayment plan.

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What are the consequences of filing for bankruptcy?

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A lower credit score and difficulty to loaning money

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How does filing for bankruptcy affect an individual's credit score?

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It may significantly lower the credit score for several years.

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Can all types of debts be discharged in a Chapter 7 bankruptcy?

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No, certain debts like student loans, alimony, and child support cannot typically be discharged.

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How long does a Chapter 7 bankruptcy typically remain on an individual's credit report?

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10 years