What Kinds of
Bankruptcies Can I Get?
The kinds of bankruptcy that you file has a lot to do with the
kind of debt that you have. If you have very little assets and a
lot of bills, you are probably going to want to look into a
Chapter 7 as you can eliminate your debt and get on the road to
being debt free in a much faster period of time. If you have
some assets and are looking for a way to keep those assets –
perhaps a home with a mortgage, etc. – you are going to want to
look into Chapter 13 as it is a payment plan over a period of
usually around five years to get you debt free. You pay back a
portion of what you owe – but you don’t pay back everything.
Now if you have a debt consolidation loan, the kind of
bankruptcy that you file will depend on how the loan is worked.
If your debt consolidation loan is unsecured and you have no
assets, obviously you are going to want to go Chapter 7. But if
you have taken out a debt consolidation loan and secured it as
perhaps a second mortgage, etc. – then you are going to want to
go Chapter 13 so that you have the ability to keep whatever
asset you secured it with – your home, etc.
It is almost never a good idea to take out a debt consolidation
loan on your home as it was once an unsecured debt and now you
are putting it on your assets so that they can seize them if you
do not pay. It is important that you keep the idea of secured
vs. and unsecured loans in your head, for you only want to do
secured if you are sure that you are going to be able to pay it
back.
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