You are trying so hard to catch up on your bills. As soon as you think you are at the point where you can begin to pay down a bill, something happens to put you behind again.
By considering bankruptcy, you are thinking of a valid way to get out from under your debts.
This is a legal process that involves you or a business. You are unable to repay your bills. You start the bankruptcy process by filing a petition. Your creditors, who are the businesses or individuals to whom you owe money, can file this petition — however, this is rare.
Once you have filed your petition, all of your assets will be investigated and evaluated. If you have any assets, these can be used to pay back some of your outstanding debts.
Bankruptcy benefits you, your creditors and the economy
Filing for bankruptcy when you are unable to pay your debts gives you a fresh start. This procedure forgives debts you cannot pay. Your creditors can get some of your debt repaid. This depends on whether you have any assets which can be liquidated.
Bankruptcy could also benefit the economy because you will have more money to spend.
Types of bankruptcy
Depending on your personal situation, you can access different bankruptcy types. These include Chapter 7, which requires passing a means test. This verifies whether your income is below the adjusted median income in Florida.
Chapter 13 allows you to complete a repayment plan within three to five years.
You can use bankruptcy to avoid foreclosure of your home or any investment property you own.