Bankruptcy is a proceeding that legally releases a person from repaying a portion of or all debts owed. Bankruptcy damages your credit for 7-10 years and should be your last resort if you cannot repay your debts.
Chapter 7 Bankruptcy: A type of consumer bankruptcy where your responsibility for your debts is cleared entirely. With this kind of bankruptcy, you are not required to pay back debts you owe from before your filing. Chapter 7 bankruptcy filing records remain on your credit report for 10 years and the record of each account included in your filing will remain on your report for 7 years. This has been the most common type of filing, but changes to bankruptcy law will make it more difficult to file for Chapter 7 bankruptcy in the future.
Chapter 13 Bankruptcy:
A type of bankruptcy where the consumer must pay off some of their
debts over time. Chapter 13 bankruptcy filing records remain on your
credit report for 7 years from the discharge date or 10 years from the
filing date if it is not discharged. Each account included in the
filing will remain on your report for 7 years.
Chapter 11 Bankruptcy: A complex type of bankruptcy usually filed by businesses that wish to restructure their debts.
Chapter 12 Bankruptcy: A type of bankruptcy specifically for farmers and fishermen. Similar to Chapter 13 bankruptcy but with a few special benefits.
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