| Understanding bankruptcy | | | | your home, stop repossession of such items as |
| Bankruptcy is basically the official way of announcing | | | | automobiles, and keep your utilities from being |
| that a person can no longer repay his debts in his | | | | disconnected. |
| current situation. Consequently, it is also a plan that | | | | Bankruptcy to get out of debt will often stop wage |
| allows the borrower to resolve his debts by dividing all | | | | garnishments and phone calls from debt collectors and |
| his assets between his creditors. The process of | | | | allow you to get out of debt without continued |
| dividing the said assets is duly supervised, all for the | | | | harassment. |
| purpose of providing equal partition among creditors. | | | | Cons of Bankruptcy |
| Types of bankruptcy | | | | When declaring bankruptcy to get out of debt, you will |
| Because there are many different debt situations, | | | | not be allowed to keep collateral owed to a creditor |
| there are also a number of different types of | | | | unless you can keep up with the payments. Declaring |
| bankruptcy to help individuals and businesses get out | | | | bankruptcy usually does not allow you to stop |
| of debt: | | | | payment on such things as child support, student loans, |
| -Straight Bankruptcy requires a debtor to be within a | | | | alimony, court restitution orders, certain types of taxes, |
| certain asset limit or to give up property over that limit | | | | or criminal fines. |
| to be sold by the court. A person who successfully | | | | If you had consignors on any of your collateral, your |
| declares bankruptcy is able to get out of debt | | | | cosigners will not be able to get out of debt with you |
| completely. | | | | as they are liable for part or all of the debt you |
| -Reorganization, is way for businesses or individuals | | | | discharge through a bankruptcy. |
| with massive debts to get out of debt. | | | | Declaring bankruptcy, in an attempt to get out of debt, |
| Pros of Bankruptcy | | | | will not eliminate your mortgage or any other secured |
| When declaring bankruptcy to get out of debt, you will | | | | loan; it will only keep these payments at bay until you |
| not have to repay most or all of your debt. | | | | have dealt with other creditors. |
| Declaring bankruptcy could prevent foreclosure of | | | | |