Bankruptcy, often considered a last financial resort, is a legal process that can help alleviate outstanding debts for individuals and businesses. Reasons to file for bankruptcy can include divorce, job loss, exorbitant medical bills or credit card debt.
There are several types of bankruptcy — six, as a matter of fact. The two most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. But there are four other types of bankruptcy as well, according to the U.S. Bankruptcy Code: Chapter 9, Chapter 11, Chapter 12 and Chapter 15.
The type of bankruptcy you file depends on your situation.
But regardless of which type you file, the process you follow is typically the same: You’ll usually find a bankruptcy attorney and make your case before a judge, who will then erase some of your debts or set you up with a repayment plan. Also note that an eligibility requirement — for all bankruptcy chapters — is that you must undergo credit counseling within the 180 days before…
This article was written by Tiffany Curtis and originally published on www.nerdwallet.com