If a person is facing severe debts that they will be unable to pay, the only viable option may be to find a reprieve from this problem. While bankruptcy is a commonly used and instrumental legal tool for debtors, there are some important factors that those considering this option may overlook when evaluating whether bankruptcy is right for them. Chapter 13 Bankruptcy Can Prevent The Loss Of Assets An important thing to realize about bankruptcy is that it may not always involve large-scale liquidation of the debtor's assets.

Chapter 7 bankruptcy is also called liquidation or straight bankruptcy. An individual files Chapter 7 to relieve them from most of their debt. The process can last three to six months. The length of your case will depend on the complexity of the case. To apply for Chapter 7, you will need to file a petition in bankruptcy court depending on the area you live in. In addition to the petition, you will also be required to file other documents such as schedules of assets and liabilities, schedules of income and expenses, schedules of executory contracts and leases, and statements of financial affairs.