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If you are an individual consumer, you most likely qualify for Chapter 7 bankruptcy or Chapter 13 bankruptcy, but not both. Your eligibility will depend on your current level of disposable income. If you have very little money left over each month after paying essential expenses (including secured debts), you may be a good candidate for Chapter 7 bankruptcy. If you have a considerable amount of money available each month, you can likely afford a Chapter 13 payment plan.

Unfortunately, many types of debts owed to any level of government are not typically dischargeable through bankruptcy. Fines, penalties, and trust fund payroll taxes can almost never be eliminated, for example. There are some limited exceptions, including applicable income taxes that are at least three years old. Government-guaranteed student loans can only be discharged in extremely specific circumstances involving undue hardship. An attorney can review the specific debts you owe to a local, state, or federal government and advise what can and cannot be wiped out.

Your credit will inevitably take a hit after filing for bankruptcy. A Chapter 7 filing will remain on your credit report for ten years, while a Chapter 13 filing will be listed for seven years.

First, it is important to understand that there is nothing shameful about filing for bankruptcy. No one should be embarrassed about pursuing relief available under the law. With that said, an unfair stigma does still sometimes surround bankruptcy, so you may be wondering about how discreet the process is. The good news is your filing for bankruptcy will not be aggressively advertised: Your creditors will be directly informed, but your friends and family will not. Your employer could conceivably notice if they no longer have to facilitate a wage garnishment, but they will not typically be directly notified about your filing. The only situation whether a relative or some other friend may learn about your bankruptcy is if they co-signed a loan with you. In these situations, they may be informed about the proceedings.

Potentially, yes. If you are at risk of foreclosure and wish to keep your home, Chapter 13 bankruptcy may be your best option. The automatic stay will stop a pending foreclosure so long as a sale has not already taken place. The foreclosure cannot generally continue until your bankruptcy case is over, so you will potentially have three to five years of protection. Your Chapter 13 payment plan will need to address your mortgage arrears and bring your loan current. Ideally, the debt reorganization should give you the funds you need to manage future mortgage payments post-bankruptcy.