Still, these loans may provide certain tax advantages that are not available with other kinds of credit. A bankruptcy stays on your credit report for 10 years, making it difficult to acquire credit, buy a home, get life insurance, or sometimes get a job. However, it is a legal procedure that offers a fresh start for people who can't satisfy their debts. Individuals who follow the bankruptcy rules receive a discharge a court order that says they do not have to repay certain debts. Each must be filed in federal bankruptcy court.
Attorney fees are additional and can vary widely.
The consequences of bankruptcy are significant and require careful consideration. Chapter 13 allows you, if you have a regular income and limited debt, to keep property, such as a mortgaged house or car, that you otherwise might lose. In Chapter 13, the court approves a repayment plan that allows you to pay off a default during a period of three to five years, rather than surrender any property. Exempt property may include cars, work-related tools and basic household furnishings. Some property may be sold by a court-appointed official a trustee or turned over to creditors.