claiming bankruptcy

Cali B and Alex D

Bankruptcy

The state of being completely lacking in a particular quality or value. The past few years the amount of people going bankrupt has gone up dramatically. People can go bankrupt for a bunch of different reasons. Medical expenses are the biggest cause. Job losses, poor use of credit, divorce, unexpected expenses and more money going out than coming in are just a few other reasons.

Advantages of claiming bankruptcy

- Filing for bankruptcy will trigger an automatic stay, which will prevent creditors from collecting their debts. They can't call you, sue you, or send you letters.

- You may be able to discharge your obligations to repay any debts.

- Many debtors can go through bankruptcy without losing any of their property.

Disadvantages of claiming bankruptcy

- The bankruptcy will be on your credit report for 7-10 years

- Most credit card companies will cancel the credit card right away

- May hinder your ability to obtain a mortgage or loan for many years

Obligations that can't be discharged

- Certain taxes

- Debts owed to a former spouse or child if they came out of a divorce or seperation

- student loans

-court fines and penalties, inculding criminal restitution