When a person realizes that they have more money going out than coming in, they may start to get stressed. For some people, there’s no easy answer to getting creditors taken care of. As this video describes, bankruptcy is a long-standing way for consumers to take control of their finances.
Modern bankruptcy laws were passed by Congress in 1898. This allows for two primary types of bankruptcy: liquidation and reorganization.
The liquidation bankruptcy for consumers is known as Chapter 7. Reorganization bankruptcy for consumers is Chapter 13.
Filing bankruptcy is a legal way to get out of debt so the filer can enjoy a fresh financial start. They can hold on to any property that’s exempt from the bankruptcy case but will have to turn over non-exempt property to pay off creditors.
There’s nothing wrong with filing for bankruptcy. Even Walt Disney filed for bankruptcy protection. That was in 1921, before the release of Mickey Mouse in 1928. George Foreman has filed for bankruptcy, as has President Donald Trump. Anyone who needs bankruptcy protection should contact a bankruptcy law firm to find out about their options.