What is a Bankruptcy?
A bankruptcy is a legal process that allows individuals or businesses to reorganize or eliminate their debts. It's often considered a last resort, but can provide relief from creditor harassment and help individuals get back on their feet.
Types of Bankruptcies
- Mandated Bankruptcy (Chapter 7): This is the most common type, where debtors sell non-exempt assets to pay off creditors.
- Chapter 11: This type is for businesses that want to reorganize and continue operating while still paying creditors.
Costs and Fees
The cost of bankruptcy can vary depending on the type, complexity, and location. Typical costs include filing fees ($300-$1,000), attorney fees (20-30% of total expenses), and credit counseling services.