What is bankruptcy?
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Most people have an idea of what bankruptcy is but there are some misconceptions about what it can and cannot do.
Bankruptcy can not eliminate student loan debt. You may also not get rid of tax debts.
You can reduce credit card debt and medical debt. You may not be able to eliminate all of your unsecured debts.
More than likely, you will have to pay back most of what you owe. This is a big drawback for people looking for a fresh start from their debts. You don’t get to wipe them out like you used to be able to.
You still have to pay back most of what you owe over a 3 to 5 year period, sometimes even longer.
And your credit is negatively affected for 7 to 10 years. This is a long time period when you consider you still have to pay back most of what you owe.
This is what makes debt settlement or debt consolidation a smarter option when you are looking for debt relief.
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