Affordable Bankruptcy
Affordable bankruptcy. There is no such thing as an affordable bankruptcy because it carries with it significant costs. It should always be an option of last resort. Although bankruptcy should be avoided at all costs, there are two types of bankruptcies, of which one is the more "affordable".
Chapter 7 Bankruptcy: This is bankruptcy in its most extreme form. All of your debts are forgiven (your credit cards, unpaid loans, etc) at a steep price. If you have any assets, they are auctioned off to help pay your debts. The fact that you've had a bankruptcy stays on your credit report for up to 10 years. Although, within several years, you can start getting normal interest rates, in the beginning, it will be very hard to get any loans or credit cards without an astronomical interest rate.
Chapter 13 Bankruptcy: This is the "affordable" bankruptcy because it is the mild form of the two types of common bankruptcy. Rather than having all of your assets auctioned off and your debt forgiven, you are given a repayment plan with very favorable terms. Essentially, Chapter 13 gives you a consolidation loan, which allows you to repay all of your debts in a planned manner. Rather than sending money to different credit card and loan companies, you just send your money to a trustee who disperses this money among your creditors.
You may think that you can make an affordable bankruptcy by representing yourself, but please keep in mind that bankruptcy law is very complicated. If you mess up on a very minor detail you can lose your house, for example.
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Amazing article! I definitely enjoyed reading it, and learned quite a bit...I will refer it to anybody that is curious about the subject matter.
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