You are faced with massive debts and you feel as if your financial world is crumbling. There are ways out and one of them is to file for bankruptcy. Before you can use this option though, it is safe to ensure that all other avenues are exhausted. This is because bankruptcy reflects on your credit for up to 7 years. However, when you look at the positive side, you get a new lease to your financial situation.

Should you decide that you have no choice but to file for it, you need to be aware which options are available and suit you best. There are two main types of bankruptcy that you can consider. There is Chapter 7 also known as liquidation bankruptcy, and there is Chapter 13, which is usually a scheduled repayment plan. However, it has become harder to file a chapter 7 due to the means test. This test looks into your resources that you have. If there is a possibility that you could repay some debt they will insist that you file under chapter 13.

At this point, it is wise to hire a lawyer. Research and settle for a good law firm, where you have direct contact with the lawyer. He should be qualified and willing to help. Meet with him and ensure that you go through all the necessary documents and aspects of filing. This will guide you into choosing the preferred chapter.

Refer your creditors to your lawyer should they keep harassing you. Your creditors will then have a meeting called a 341 meeting with him. This is to ensure that you have given a truthful testimony on your petition and you understand the terms. Your debt plus assets are calculated and included in the bankruptcy proceedings. For a chapter 7 bankruptcy filing, your assets are liquidated and repaid to your creditors. If you file under Chapter 13, you enter a repayment plan with your creditors for a period of 3 to 5 years. You get a discharge after 60 days after the 341 meeting. This means that you are under no further obligation to repay the debt.