Significance

• Bankruptcy provides you a formal process through which you can eliminate or develop a payment plan to deal with all of your debt.
  
  

Types

• There are two types of consumer bankruptcies. Chapter 7 bankruptcy eliminates your debt. Chapter 13 bankruptcy establishes a payment plan to pay off your debt.
  
  

Effects

• The effects of bankruptcy include providing you a chance to carry on with your life with a clean financial slate.
  
  

Time Frame

• A Chapter 7 bankruptcy normally takes about six months to complete. A Chapter 13 bankruptcy usually includes a payment plan that runs from three to five years.
  
  

Warning

• Bankruptcy is a complicated process, and you are best served considering retaining an attorney to represent you.