Bankruptcy Process

Bankruptcy is a legal process that helps individuals or businesses unable to repay their debts. It begins when a person or entity files a petition with a bankruptcy court. There are different types of bankruptcy, with Chapter 7 and Chapter 13 being the most common for individuals. Chapter 7 involves liquidating assets to pay off debts, while Chapter 13 allows for creating a repayment plan over three to five years. The court assesses the situation, stops creditor actions, and ultimately provides a fresh financial start, though it can have long-term effects on creditworthiness.