If you're planing to file for bankruptcy, you will have to make your choice between two major types of bankruptcy.
Choose what's best for you and your family, not what you think will please the creditors.
Chapter 7, or straight bankruptcy, is what people usually refer to as bankruptcy.
Your debts will go away and you will most likely lose some of your properties to your creditors.
You won't have to worry about payment plans and you will have a clean slate after the process is completed.
Still, there are downsides to the matter.
Your assets may be sold by the trustee in order to pay your debts.
That mostly happens on paper.
In the real world, most people that file for bankruptcy don't own too many things, so the creditors don't have anything to take.
Note that the shirt of your back is off-limits even for them.
In order to qualify for Chapter 7, you must pass the Means Test.
This test is used to decide if you can't actually afford to pay part of your debts instead of just letting them go away through bankruptcy.
If the reveals that you can pay, you will be denied bankruptcy.
Also, you will have to prove that you are acting in good faith.
An unexpected illness or calamity should be the most proof you need.
In addition, make sure that your paperwork is accurate and complete.
Chapter 13 is the type of bankruptcy where you are allowed to make a plan and pay what you can afford over period of time.
The creditors may not be happy with it, as they get only a small portion of their money back.
Only people with an actual income can file for Chapter 13.
It doesn't matter the type of income, as long as it is stable and regular.
All in all, filing for bankruptcy may be a little harder than most people think.
Still, if you meet the requirements you shouldn't have a problem having your bankruptcy approved.