There comes a time under certain circumstance where your choices become limited and you may feel compelled to consider bankruptcy. The first thing to understand is that not all bankruptcy is created equally. There are a variety of options when considering filing for bankruptcy that you need to thoroughly understand before you decide to head down that road.
If you have massive debts from medical issues or a failed business and lack the income to ever be able to beat those debts down then quite obviously bankruptcy may make sense for you. In that case you would be considering a Chapter 7 bankruptcy which essentially wipes away all of your debts but also, depending on state statutes, take away the majority of your assets for liquidation to repay creditors. On the other hand, if you have found yourself swimming in debt that you have no way of digging out of because of the great amounts of interest and minimum payments than you may be a candidate for a different type of bankruptcy.
Chapter 13 bankruptcies allow for a repayment plan administered by a court that will let the debtor pay back his debts while the creditors may be forced to suspend interest and penalties in order to allow the individual to basically “catch up” without losing their assets. So, do your homework if you find yourself burdened by overwhelming debt and see what options work best for you as an individual. You may find that the answer is less frightening than previously thought. Also, you need the right direction and support while going through your bankruptcy, so be sure to seek out a qualified bankruptcy attorney.