What is bankruptcy?
Bankruptcy is the legal way to “discharge” debts. Discharge means once the bankruptcy is finished, creditors listed on the bankruptcy papers can’t contact you or collect from you.
The two main kinds of bankruptcy are Chapter 7 and Chapter 13.
A Chapter 7 or full bankruptcy lets you get rid of (or discharge) debts you can’t pay.
A Chapter 13 sets up a payment plan OK’d by the court. This lets you pay all or part of your debts over time. A Chapter 13 plan might let you keep your property and pay your debts. A Chapter 13 plan protects you from being sued or having your property taken.
Your lawyer will tell you what kind of bankruptcy is best for you. In some cases, only a Chapter 7 will work. But in many cases, a Chapter 13 is better.