There are different personal bankruptcy protection options to suit different needs which is why it is helpful to be familiar with those are when a consumer finds themselves struggling with overwhelming debt. Different personal bankruptcy options are better suited for the different circumstances and goals of the filing party but all afford the opportunity to enjoy debt relief.
There are two primary types of personal bankruptcy. Chapter 7 bankruptcy protection is for filing parties that do not meet a certain income threshold who wish to liquidate their non-exempt assets to repay creditors. It is important to note that certain assets are exempted from the process which affords addition protections to the filing party. Chapter 13 bankruptcy is the other primary type of personal bankruptcy protection.
For individuals who exceed the income level allowable to file for Chapter 7 bankruptcy, Chapter 13 bankruptcy is another personal bankruptcy option. Chapter 13 bankruptcy allows the filing party to reorganize their debt and repay it over a period of time provided that they have a reliable source of income with which to repay the debt. How property may be handled can vary by the type of bankruptcy protection that has been filed and in some circumstances, the filing party may be able to keep the property and in others not.
It is helpful for those considering personal bankruptcy protection to understand these differences and details and also the income limits to qualify for one type of bankruptcy or the other which vary by state. Understanding what option is best for them can help struggling consumers select a bankruptcy option that will provide debt relief for them.