Over the course of the past few years there have been people from all over the United States who have been seriously affected by all of the financial and banking problems that have been so prevalent. Nearly everyone knows someone who’s life has been seriously impacted by these rough financial waters. More than a few people have had to consider personal bankruptcy. Personal bankruptcy in Chandler, AZ has been a hot topic, just like it has been all over the country. If you’ve run into financial problems and have considered the possibility of filling for bankruptcy, it’s a good idea to have a basic understanding of what bankruptcy really is.

All About Personal Bankruptcy

The bankruptcy laws were put into place to help a person receive protection from their  creditors and to allow that person a chance to start over with a clean financial record. Without bankruptcy laws it would be very easy for creditors to continually harass people for payments and even take these folks to court to get paid for bad debt. The bankruptcy laws offers people a measure of protection against these kinds of actions. Once you file bankruptcy, your creditors are not allowed to take any of these actions against you. This allows you the chance to reduce, eliminate, or repay your debts in a way that is easier and less stressful overall. Bankruptcy exists to help people, not as a form of financial punishment.

Common Types of Personal Bankruptcy

For individuals, Chapter 7 and Chapter 13 are the most common types of bankruptcies filed. Chapter 11 bankruptcy, which is mentioned so often on the news is strictly for businesses. People in Chandler, AZ should become familiar with the two more common types of personal bankruptcy. It is likely that you will use one of these two bankruptcy types if you should make the decision to file.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is commonly known as “liquidation bankruptcy”. The reason it is called this is because all personal debt is wiped away after personal property has been sold off, or liquidated to pay for personal, unsecured debts. Chapter 7 can be a drastic step and isn’t the best solution for all people, but for those who don’t have a lot of personal property and are in need of the protection and help of bankruptcy, it can be the perfect solution.

Chapter 13 Bankruptcy

Chapter 13 allows people to get on a structured payment plan for their personal debts. These people are protected by the bankruptcy laws and are given the chance to reduce or eliminate some debts, while systematically repaying creditors according to a plan approved by the court. This allows people to get back on track financially without losing their property.

Talk with a financial professional to see which type of personal bankruptcy would be best for your situation.