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Quick Summary: Bankruptcy is a legal process that offers relief from overwhelming debt for individuals and businesses. Certain debts—such as creditcarddebt, medical bills, and personal loans—can be discharged. However, not all debts can be discharged. This provides relief from significant healthcare costs.
The Chapter 13 plan reorganizes your various debts, including personal loans, into a monthly payment plan that lasts three to five years after your filing date. Unlike Chapter 7 , you’ll pay part of the money you owe on unsecureddebts, but most Chapter 13 payment plans reduce the total amount you’ll need to pay.
Chapter 13 Bankruptcy Discharge Once you complete paying off your repayment plan over three to five years, the court will discharge your eligible debts. The reason why creditors prefer you file Chapter 13 is because Chapter 7 bankruptcy discharges unsecureddebts after the trustee liquidates nonexempt assets.
You can combine creditcarddebt, car finance, personal loans, student loans, medical bills, payday loans, and other types of unsecureddebt. But is debt consolidation a good idea for you? If your score is low, you’ll need to know how to fix a bad credit score before going through the application process.
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