By: Bovemsa CheungFiling for bankruptcy is a very serious issue. Once an individual files for bankruptcy their whole life will change and bankruptcy will cause lifelong damage. It is best to avoid bankruptcy if possible. Although filing for bankruptcy may seem as if you are lifting a debt burden off your shoulders there is a whole other side to it. Bankruptcy is listed in the top 5 life-altering negative events that people can go through.
There are various types of bankruptcy that people can file. The Chapter 7 bankruptcy is known as total bankruptcy. This form of bankruptcy can stay on your credit report for 10 years. Also, all debts are not wiped out in chapter 7 bankruptcy because certain types of debt cannot be erased. Chapter 13 bankruptcy is similar to a payment play and can stay on your credit report for 7 years.
When an individual files for bankruptcy, the public will not know unless this person is somewhat famous and the media finds out. The only people that do know if someone is filing for bankruptcy are creditors. Bankruptcy is a public legal process but so many people do file for bankruptcy that it is hard to keep track of everyone.
Some people should file for bankruptcy while other individuals can avoid it. Inexperienced people should contact an attorney or bankruptcy consultants.
Sources:
http://moneycentral.msn.com/content/Banking/bankruptcyguide/P77617.asp
http://www.daveramsey.com/the_truth_about/bankruptcy_3018.html.cfm
http://www.bankruptcyaction.com/questions.htm
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