The Definition and Process of Bankruptcy
Bankruptcy is a legal process that allows individuals or businesses to restructure their debts and financial obligations when they are unable to pay them. There are several types of bankruptcy, including Chapter 7, Chapter 11, and Chapter 13. Chapter 7 bankruptcy involves the sale of assets to pay off creditors, while Chapter 11 requires the company to reorganize its finances and create a plan for repayment. Chapter 13 bankruptcy involves creating a repayment plan that can take several years to complete.
Types of Bankruptcy
Consequences of Failing to File for Bankruptcy
Failing to file for bankruptcy can have serious consequences, including damage to credit scores, loss of assets, and potential wage garnishment. It is essential to understand the process and benefits of bankruptcy before making a decision.