Is Bankruptcy Right for You?
There are two primary types of consumer bankruptcies, Chapter 7 and Chapter 13. A Chapter 7 Bankruptcy helps eliminate most debt for individuals and business owners. Chapter 13 Bankruptcy can help you get current on your house, modify your vehicle loan, and significantly reduce payments to unsecured creditors like medical bills and credit card debt. However, a Chapter 7 and a Chapter 13 may not eliminate all your debt.
Below are some things that Bankruptcy CAN and CANNOT Do.
WHAT CAN IT DO
- A Chapter 7 can eliminate all unsecured debt, including credit cards, personal loans, medical debt, and certain business debt.
- A Chapter 13 may greatly reduce what you must pay on all of your unsecured debt. It can range from 1% to 100% repayment depending on the case.
- It can stop Civil Lawsuits and garnishments.
- A Chapter 13 that will have a plan that allows you to get caught up on your mortgage and vehicle payments. It may also allow you to modify how much you must pay on your vehicle.
WHAT IT CANNOT DO
There are certain exceptions to a Debt being discharged. An example of these include the following:
- Most Taxes,
- Debts obtained by Fraud,
- Domestic Support Obligations including child support and alimony,
- Student Loans,
- Criminal restitution or other court ordered restitution, and
- A debt as the result of causing death or personal injury to another while under the influence of Drugs, Alcohol or any other substance.
WILL BANKRUPTCY HURT MY CREDIT?
A Bankruptcy will be on your credit report for 7 to 10 years depending on what type of case you file. Bankruptcy will affect your credit. Typically, your credit score will drop when you file for Bankruptcy, however this does not mean you will not be able to purchase a car, get a credit card or even buy a house during this time.
Nothing contained in this section or on this site is considered to be legal advice. Contact Eden Sarver today at 614-264-0175 to discuss your options based on your individual situation.