Consumer Bankruptcy
Consumer bankruptcy is a legal process that allows individuals or households unable to pay their debts to seek relief. It provides a way to eliminate or reorganize debts under court supervision. The two main types are Chapter 7, which discharges most unsecured debts, and Chapter 13, which allows individuals to create a repayment plan over three to five years. Filing for bankruptcy can protect assets and stop creditors from pursuing collections, but it also has long-term effects on credit scores and financial standing. Ultimately, it offers a fresh start for those struggling with overwhelming financial burdens.
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Consumer bankruptcy is a legal process that allows individuals overwhelmed by debt to seek relief and obtain a fresh financial start. It typically involves filing for bankruptcy under either Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. Chapter 7 can eliminate most unsecured debts, while Chapter 13 involves a repayment plan over three to five years. Although bankruptcy can negatively impact credit scores, it provides relief from creditors and the opportunity to rebuild financial stability. It’s a way for individuals to regain control of their finances when they can no longer manage their debts.