Does Debt Go Away After Filing For Bankruptcy?

Filing for bankruptcy can be a complex process, but it's not impossible to wipe out your debt. In the United States, there are two types of bankruptcy: Chapter 7 and Chapter 13.

Benefits of Bankruptcy

Bankruptcy can stop creditor harassment and lawsuits, giving you time to regroup and plan your finances.
Your debt will be discharged, meaning it's canceled or forgiven. This is a major benefit for those struggling with debt.
Bankruptcy can also provide temporary financial relief by eliminating payments on credit cards, loans, and medical bills.

Consequences of Bankruptcy

Bankruptcy may have long-term consequences for your credit score. However, the impact varies depending on factors like income and debt-to-income ratio.

Chapter 7 bankruptcy can lead to a reduced credit score within six months. The exact impact depends on individual circumstances.
Chapter 13 bankruptcy typically requires regular payments for debt repayment over three to five years, which may be challenging for those with high incomes or expenses.