Bankruptcy Information – The Basics
The federal bankruptcy statute provides a release of the debtor from personal liability for specific debts. This prevents the creditor from taking any action to collect the debt. This is not true for all types of debt, secured debt such as your home or car can be reclaimed as the creditor's property. Unsecured debts like student loans are also not discharged by bankruptcy.
Bankruptcy is considered a last resort because of the impact to your credit record, rating and score. This will negatively affect your ability to secure credit in the future, for up to ten years. Bankruptcy laws have changed recently and any consumer considering bankruptcy should seek professional debt help and counseling to ensure this is the best solution for their debt problem.
Bankruptcy is usually the most extreme measure for anyone requiring debt help. People who cannot afford to make monthly bill payments, a monthly debt management plan payment or would not be able save for a debt settlement would be candidates for bankruptcy.
