Introduction
Bankruptcy is a legal process that helps individuals and businesses who are unable to repay their debts to get a fresh start. It can be a complex and emotional process, but understanding the basics can help alleviate some of the stress that comes with it.
Types of Bankruptcy
- Chapter 7: Liquidation of assets to pay off debts
- Chapter 13: Repayment plan over 3-5 years
Consequences of Bankruptcy
Bankruptcy can have long-term repercussions on one’s credit score and ability to borrow money. It can also affect job prospects and housing options.
Benefits of Bankruptcy
- Debt relief
- Protection from creditors
Case Studies
For example, Jane, a single mother, filed for Chapter 7 bankruptcy after losing her job. With the help of a bankruptcy attorney, she was able to discharge her debts and start fresh.
Statistics
According to the American Bankruptcy Institute, there were 752,160 bankruptcy filings in 2020, a 29% decrease from the previous year.
Conclusion
Bankruptcy is a valuable tool for individuals and businesses in financial distress. It is important to seek legal counsel to navigate the complexities of the process.
