Some people associate bankruptcy with the ability to just have debts written off. What they don't realize is that there are different types of bankruptcies. A Chapter 13 bankruptcy is one that a person can file if they have too many exempt assets or an income that sufficient to repay some of their debts.
Unlike a Chapter 7 bankruptcy, a Chapter 13 bankruptcy requires you to make regular payments to the bankruptcy trustee so that the debts can be paid down. Once you have made all scheduled payments, the remainder of the balance you have with any creditor is discharged.
We realize that this might sound like it is going to take a long time. It is true that this isn't the fastest form of bankruptcy, but it is still worth looking into. When you enter into this type of bankruptcy, you will have to establish a repayment plan. That will last three to five years. Typically, if you make less than the current state median income when you file, you have a 3-year plan. If you make more than the current state median income, you have a 5-year plan.
While your bankruptcy case is active, you can't open new lines of credit unless the court approves. This is a big factor to think about because it means you can't buy a new vehicle or look for a new home during the next few years.
It is imperative to take a look at your entire financial situation before you determine what you are going to do. If you do need to file for bankruptcy, remember that you can use this as your fresh financial start as long as you protect yourself.