There are two primary types of consumer bankruptcy - Chapter 7 and Chapter 13. Named for their locations in the U.S. Bankruptcy Code, these types have differing eligibility criteria and follow different processes:

Chapter 7 is available to those below an income and asset limit. If you don't own a house or make a significant income, this may be the right choice for you. Generally, you can keep most of your property while discharging (wiping away) qualifying debts in a matter of months.

Chapter 13 is better suited for those who own homes and earn a decent income. It involves consolidating your debts into a single, affordable monthly payment over the course of a three- to five-year repayment plan. Once that repayment plan is complete, the remaining qualifying debts will be discharged.

Both types of bankruptcy will put a stop to creditor harassment and ultimately provide the clean slate you need to start rebuilding your credit.

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Chapter 7 bankruptcy allows you to liquidate (essentially erase) many types of debts, including credit card balances, medical bills, utility bills, unpaid rent, tax debts and mortgages.

A bankruptcy lawyer can explain everything you need to know about filing. Contact us today!

Chapter 13 bankruptcy does not liquidate debt like Chapter 7. Instead, you enter into a repayment plan, usually lasting three to five years.

Once you complete the plan's terms, the debts are discharged from your record. Most debts can be resolved through Chapter 13, with certain exceptions, including student loans, child support and alimony, mortgages and some tax debts.

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A Chapter 13 bankruptcy will stay on your credit report for seven years before it is removed. According to Forbes, a Chapter 7 bankruptcy stays on your credit history for 10 years.

A bankruptcy lawyer can explain everything you need to know about filing. Contact Janssen Law, PLC today to learn more.

Fortunately, 401(k)s and most other retirement accounts are exempt from bankruptcy liquidation under Chapter 7 and won't count as an asset under Chapter 13, thanks to the Employee Retirement Income Security Act, unless you withdraw funds from the account during the bankruptcy process.

To learn more, contact a bankruptcy lawyer today.

Filing for bankruptcy jointly with your spouse is often a good idea, but it is not legally required. Whether one spouse files alone or both spouses file depends on your particular circumstances. Your bankruptcy lawyer can advise you on how to proceed.