While bankruptcy is never a good thing to talk about, some people have no other option. Bankruptcy is a legal procedure that provides debt relief to consumers who cannot pay their bills. It should, however, be used only as a last result when it comes to your financial problems. It is a very important step in your financial career, and should only be used as a last result. There are two types of bankruptcies you should know about:

• Chapter 13 or "reorganization" allows debtors with a steady income to pay off all or part of their debts over a 3 to 5 year period instead of surrendering property.
• Chapter 7 or "straight bankruptcy" is the most drastic type of bankruptcy. Debtors turn over to a court representative all of their assets for distribution to creditors. Unlike Chapter 13, there is no repayment plan, and the court will then declare that legally the debtors are no longer in debt.

If you are unfortunate enough to have had to file for bankruptcy, it will be a very detrimental negative mark on your credit history. It will lower your overall credit score, and will most likely keep you from getting a loan or qualifying for a new car in the future. If you have a bankruptcy on your credit history that is holding you back, please enter your information in the form below to be contacted about your Free Credit Consultation.