Personal bankruptcy protections are a valuable resource that can help struggling consumers looking to offload debt and enjoy a fresh financial start. The American Bankruptcy Institute recently reported that bankruptcies increased during the month of August, though year-over-year bankruptcy numbers are down. Both consumer and commercial bankruptcies were up during the month of August. Consumer bankruptcies increase by 4% in August. Commercial bankruptcies increased by 3% in August.
Bankruptcy protections can help struggling consumers and businesses enjoy debt relief. Recent changes in bankruptcy laws have increased access to bankruptcy protection for struggling businesses, family farmers and veterans. Dealing with debt everyday can be overwhelming which is why there are both liquidation and reorganization bankruptcy options for both struggling consumers and struggling businesses. Chapter 7 bankruptcy is a liquidation bankruptcy option that allows the filing party to repay creditors by liquidating non-exempt assets.
Chapter 13 bankruptcy is a reorganization bankruptcy option that allows the filing party to reorganize their debt and repay it over a manageable period of time. Both options provide a debt discharge at the end of the process. There are different requirements to qualify for each type of bankruptcy but each type is designed for the different situations and needs of the filing party so it is helpful to evaluate which option is best for the filing party’s situation and circumstances.
Bankruptcy is an important legal protection for those seeking a fresh financial start and who may be tired of living with overwhelming debt. Understanding how various bankruptcy options will apply to their situation and help them is valuable information for any party considering filing for bankruptcy to have.