One consequence of a Chapter 7 bankruptcy is the loss of nonexempt property (or its value in cash). For most consumers in financial trouble, this is not a problem because consumer debtors rarely have any nonexempt property. A bankruptcy will be part of your credit history for 10 years under the Fair Credit Reporting Act. [...]
Generally, the greater your dischargeable debt — debts that can be wiped out in bankruptcy — in proportion to your ability to pay, the more beneficial bankruptcy would be. Bankruptcy is often the only sure way to prevent unsecured creditors — a person or a company that loaned you money without collateral security — from [...]
Trying to negotiate with creditors to reduce monthly payments or to skip some payments Getting help from a nonprofit credit counseling group
Bankruptcy cannot relieve you of all debts. The following will probably still be your responsibility: Alimony and child support Drunken driving judgments Criminal fines Criminal restitution Debts incurred by fraud or intentional wrongdoing Back taxes less than three years old Student loans
Once a bankruptcy petition is filed, there is an automatic stay that immediately halts creditor actions against you, including most foreclosures, repossessions, garnishments or attachments, utility shut-offs and, in many cases, evictions. Bankruptcy may provide total protection for a home, a car or other vital property.