It is a good practice to try all methods of debt repayment. However sometimes when there is no chance of salvation you have to opt for bankruptcy. There are various bankruptcy chapters meant for different situations and they are Bankruptcy Chapters 7, 9, 11, 12, 13, 15. You can either file for the bankruptcy chapter 7 or bankruptcy chapter 13 which is meant for individuals. You also need to be aware that filing for bankruptcy charges could affect your credit scores adversely which could hamper your chances of availing any future loans thereafter.
Bankruptcy Chapter 7- In this clause the officials who are entrusted with the responsibility of assessing your property meant for bankruptcy, sell the assets which fall under the jurisdiction to repay your creditors based on the amounts that you owe to each one of them. The bankruptcy chapter 7 is meant for the benefit of individuals, couples who are married, partners and corporates. Chapter 7 is applicable to only unsecured debts such as personal loans and credit cards.
Bankruptcy Chapter 13 has been set up for individuals who are earning a steady income and have some unsecured and secured debt within the prescribed limits. Here you are allowed to retain your assets but need to make your repayments from the income that you would be earning in the future over a time span. This chapter is also meant for prevention of foreclosure while you repay your dues.
This site can guide you to further steps to take.
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