Bankruptcy is often confusing and emotionally scary, for it’s a detailed legal process and most people don’t fully know what the outcome of the process will be. Because bankruptcy is legally defined, however, going through a bankruptcy is manageable if you have someone on your side who’s familiar with the process.

Bankruptcy Is a Legal Process of Absolving Unpaid Debts

Despite all the potential complexities, bankruptcy is a fairly straightforward concept at heart. It’s a legal process that individuals and businesses can go through to absolve themselves of unpaid debts that they won’t be able to pay in the foreseeable future.

This isn’t an excuse to ignore bills, and payment plans are preferable if you’ve fallen behind on bills and just need some time to catch up. When loans are truly unpayable, though, this is a legal way to exit your loan arrangements with creditors.

There Are Two Main Types of Bankruptcy

In the United States, there are two main types of bankruptcy that individuals may pursue if they need to.helping hand from bankruptcy attorney

Chapter 7 bankruptcy is for people with limited incomes who can’t pay back all or some of their debt. Disposable income must meet certain requirements to qualify, and the process involves selling most assets to pay back creditors what you’re able to. After starting, most people receive a discharge in a few months.

Chapter 13 bankruptcy has no income restrictions and doesn’t require liquidating assets through selling them. Instead, a court-ordered repayment plan is set up so that the debts are eventually paid. Debtors must repay an amount equal to their nonexempt assets (which may be liquidated if they fail to adhere to the plan). This process normally takes a few years.

Many People Have Gone Through Bankruptcy

While it might seem like you’re all alone when going through bankruptcy, many people have gone through both chapter 7 and chapter 13 bankruptcies. Hundreds of thousands of people file every year, and help is available for if you need to declare bankruptcy yourself. You don’t need to face this alone.

If you’re contemplating declaring bankruptcy, contact the attorneys at Clark & Washington, LLC. One of the firm’s attorneys would be happy to sit down with you and go through a no-fee, no-obligation consultation, during which time they can both review your situation and explain what options are available to you.