Personal Bankruptcy

If you have serious debt and have reviewed all other debt relief options, bankruptcy may be the option of last resort that allows you to get a fresh start.

While bankruptcy does erase most debts completely, it creates a public record that stays on your credit report for 10 years. This can make it hard to be approved for a car loan, home loan or refi, obtain life insurance, or even get a job.

Wherever you are in assessing your situation, we're here for you and ready to help.

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Because of the long-term challenges a bankruptcy can create, it's important to carefully consider bankruptcy before proceeding.

As with all serious financial decisions, get professional advice to evaluate both the immediate benefits and long term affects of bankruptcy.
  • Your debts run into the tens of thousands of dollars and far exceed your ability to pay them off.
  • You have tried your best to get better terms from creditors and can't find a solution.
  • Creditors are closing in on you,and you are facing possible foreclosure or other legal proceedings.

Types of Bankruptcy

There are two main types of bankruptcy: Chapter 7 and Chapter 13.
Chapter 7 is a straight bankruptcy and requires a liquidation, or sale, of all assets that aren't exempt.

Chapter 13 allows people with a steady income to keep ownership of property, while a court approved payback plan is arranged over a duration of 3-5 years.

New Bankruptcy Law

A new bankruptcy law went into effect in October of 2005. Under this law, people are now required to get credit counseling from a government approved organization within six months of filing for bankruptcy.

In addition, in order for debtors to qualify for filing a Chapter 7 bankruptcy, it's required that individuals earn less than their state's average income. Those that earn more than the state average are still allowed to file Chapter 13 bankruptcy.

Other notable changes in the bankrupcty law:
  1. The time period required to payoff Chapter 13 debts has been increased from three to five years, meaning that Chapter 13 filers will have to pay back a higher percentage of owed debts.
  2. Debtors will now have to pay back in full any auto loans made within 30 days of bankruptcy
  3. People can only file Chapter 13 Bankrupty every two years. In the past there were no limits!
  4. Because the new bankruptcy law includes the average income requirement, along with related income provisions, pay stub and tax return requirements, legal fees are likely to be much higher for bankrupcty.
The Debt Relief Center helps individuals in debt find the best available debt relief option.

Take a moment to list the amount of debt you have and the type of debt, and the Debt Relief Center will connect you to a company that can best meet your needs.