How Bankruptcy Shortcuts your Financial Recovery | Tampa Bay Bankruptcy Center, P.A. - JDSupra

How Bankruptcy Shortcuts your Financial Recovery | Tampa Bay Bankruptcy Center, P.A. - JDSupra

US law on bankruptcy: Click the link above to read full text.

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Are you drowning in debt like so many people are these days? Does it feel like you always have “too much month at the end of the money” every month? You can either soldier on and try to change your fortunes in this tough economy or take the easier route – file for bankruptcy.

How does bankruptcy put you on the road to financial recovery? There are 2 forms of bankruptcy for individuals (as opposed to companies, municipalities, governments etc) and they are called Chapter 7 and Chapter 13 bankruptcy (following the sections in the bankruptcy code that govern them). Each of these bankruptcies work in different ways and both bring benefits.

The most obvious benefit is that bankruptcy wipes you financial slate clean of all your debts. Under Chapter 7 bankruptcy (called liquidation bankruptcy), your non-exempt assets are liquidated and the proceeds are used to pay off your debts. After all non-exempt assets are sold off, the rest of the debts are forgiven so that you can have a fresh start financially."