Guide & Help for Bankruptcy

Choose Bankruptcy Type

When you decide that you need financial help, you can choose between a a few different types of bankruptcy. The main types of bankruptcy that most individuals file for are Chapter 7 and Chapter 13. With Chapter 7 bankruptcy, you get to start over after most of your debts are completely discharged. With Chapter 13 bankruptcy, you set up a repayment plan with the help of the court and repay your creditors over a span of three or five years. If you choose Chapter 7, you have to qualify for it based on how much debt and income you have.

Regardless of which type of bankruptcy you decide to pursue, you will file in basically the same way. You will need to go to the local bankruptcy court and file a petition for bankruptcy. In addition to filing this petition, you will need to pay a filing fee of around $300 as of 2011. If you cannot afford to pay the filing fee, you could set up an installment payment plan for the fee and in some cases, have the fee waived.

If you want the assistance that bankruptcy can provide, you have to abide by the rules of the court throughout the process. The court will appoint a bankruptcy trustee to oversee your case, and you have to work closely with him. You have to be at all of the appointments that are set by the court such as the initial hearing and the meeting of creditors. You will also be required to attend credit counseling before the court will hear your case.

One of the biggest problems that comes with bankruptcy is that your credit will be ruined. While your credit will be damaged, this is only a temporary situation. You can start taking steps immediately after the bankruptcy is completed to rebuild your credit score. While the bankruptcy will stay on your record for 10 years, you can start to improve your score regardless. You can get a credit card, make small purchases on it and pay them off every month. Paying your bills on time every month and avoiding accumulating more debt can help you get your credit back on track after bankruptcy.