Various forms of bankruptcy.
Chapter 7 and chapter 13 are the two most common forms of bankruptcy. A Chapter 7 bankruptcy is a complete bankruptcy that remains on your credit report for ten years. A Chapter 13 bankruptcy resembles a payment plan and remains on a credit report for seven years.
However, the more subtle consequences of declaring bankruptcy are permanent. Numerous job and loan applications will inquire as to whether you have ever filed for bankruptcy. Lying to get a loan because your bankruptcy is very old or to improve your employment prospects is technically the same as committing fraud, so avoid bankruptcy!
Avoid filing for bankruptcy if you own property.
One of the primary factors why someone would attempt to avoid bankruptcy is property ownership. Chapter 7 bankruptcy can only seize your property and any equity to repay a portion of your debts. A person who files for Chapter 7 bankruptcy may be required to locate a new place for his family to live and a new vehicle. In contrast, filing for Chapter 13 bankruptcy will enable you to repay a portion of your debt over a period of years. When filing for either form of bankruptcy, however, nothing is guaranteed.
If your creditors can prove you committed fraud.
If your creditors can demonstrate that you filed bankruptcy fraudulently and never intended to pay them back, you may want to avoid bankruptcy. If convicted of fraud, you may have a bankruptcy filing on your credit report and continue to owe money.
Unless you have little equity, property, and investments such as stocks and real estate, or you don't mind having your credit rating adversely impacted for 7 to 10 years, you may want to avoid bankruptcy.
If you earn more than the state's median income.
If the preceding statement is true, it is possible that you will be forced to file for Chapter 13 bankruptcy instead. A Chapter 13 bankruptcy plan requires you to pay your entire disposable income to a court-appointed trustee, who then pays your creditors. Note that the court will calculate your disposable income based on county-level and national averages for necessary expenses. It is not determined by what is commonly referred to as ""pocket money."" For instance, paying a lot for a new television or car does not necessarily mean the court will approve of it. In rare instances, the court has even ordered families to cease sending their children to private schools in order to free up funds for creditor repayment. In addition, missing even one payment may constitute contempt, and the court may order you to repay the debt in full; this is all the more reason to avoid bankruptcy.
" - https://www.affordablecebu.com/