Bankruptcy protection can be an effective strategy to solve a difficult financial situation. There are two primary types of personal bankruptcy – Chapter 7 and 13.
For people with lower incomes, Chapter 7 often results in a full discharge of unsecured debt on a short time line. A chapter 13, on the other hand, is a repayment plan where some of the debt is repaid over a 3 to 5 year period.
Although both Chapter 7 and 13 get rid of unsecured debt such as credit card debt and medical bills, some debts including student loans and back taxes may not be eligible for discharge. However, many find that after discharging unsecured debt allows them to manage remaining debt more easily.
Although there are many advantages of bankruptcy protection, some worry about the effect declaring bankruptcy will have on their credit. It is true that bankruptcy will stay on a credit report for several years, but it is the first step to rebuilding good credit, a process that can start immediately using various approaches such as a secured credit card.
Bankruptcy protection is one of many tools to reach your financial goals. It is important to work with an experienced bankruptcy attorney to determine if bankruptcy protection is the right strategy for your financial situation. An experienced bankruptcy attorney will ensure that you are able to discharge the maximum amount of debt and while taking full advantage of exemptions available to filers.
When you have questions regarding an effective strategy for bankruptcy protection, contact Peoria, Illinois bankruptcy lawyer Charles E Covey for more information at 309-674-8125.