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*Bankruptcy* is a legal status of a person or other entity thatcannot repay the debts it owes to creditors.In most jurisdictions, bankruptcy is imposed by a court order,often initiated by the debtor.

Bankruptcy eliminates most, but not all debts. Exceptions are most student loans, recent taxes, alimony and child support, debts acquired through fraud, government penalties, restitution or fines, debt from luxury services or goods and certain cash advances taken within 60 days of a bankruptcy filing.

Types of Bankruptcy

Chapter 7: basic liquidation for individuals and businesses; also known as straight bankruptcy; it is the simplest and quickest form of bankruptcy available

Chapter 13: rehabilitation with a payment plan for individuals with a regular source of income; enables individuals with regular income to develop a plan to repay all or part of their debts; also known as Wage Earner Bankruptcy.

Who can File for bankruptcy?

Prior to October 17, 2005, it was largely up to a bankruptcy judge to decide whether a debtor met Chapter 7 requirements. Judges, therefore, could use substantial discretion when assessing the debtor's financial situation. As a result, under the old law, most filers chose to have debt discharged even if they were financially capable of repaying the debt in a Chapter 13 repayment plan. Consequently, the intent of current bankruptcy law is to weed out filers who can afford to repay some of the debt.

Under new law, a debtor must qualify for Chapter 7 by meeting certaincriteria. If the debtor fails to meet Chapter 7 requirements, a bankruptcy court can convert the case to a Chapter 13 bankruptcy. With the exception of disabled veterans that file to eliminate debt that was incurred while on active military duty or filers with debt that primarily came from operating a business, all other filers must meet Chapter 7 requirements.

I called into Century looking for help and a way to pay down my debt at a reasonable interest rate, James was informative and professional. He performed a free consultation, evaluated my finances and wrote out a proposal that showed me how their services could help me. I am two years into the program, and I’m thrilled with the job you guys are doing.

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