What Happens When You File for Bankruptcy?
Being in bankruptcy is never a pleasant experience. You have to deal with a lot of stress during this period.
You have to deal with all the collection calls at home. And what happens when you actually file for bankruptcy. Let's see...
Bankruptcy is the last thing you can opt for. Before that, try negotiating with your creditors and do all the possible things to avoid this situation.
If everything else fails, you can file for bankruptcy. You can also appoint a credit counselor who will guide you through the process.
There are two types of bankruptcy; Chapter 7 and Chapter 13 bacnkprutcy. You need to select which one is suitable for you.
Chapter 7 bankruptcy liquidates all your assets in order to pay your creditors. Home equity refers to your property, but not your boats, second car, bank accounts, etc.
On the other hand, chapter 13 bankruptcy will keep all your assets but the collectors will need to get their money within in the next 3-5 years.
When you decalare bankrptcy, you telling everyone that you no longer be able to pay back the debts and chapter 7 will stay on your credit history for 10 years while capter 10 stays for 7 years.
The only good thing for you is that it doesn't much affect your employment career and the record also stays there for a few years.