Debtors have the chance to choose between two types of bankruptcy – Chapter 7 and Chapter 13. The most popular between the two is Chapter 7, which is also known as “liquidation bankruptcy”. In this type of bankruptcy, your assets are placed at risk for liquidation. The proceeds of the liquidation process will be used to pay off your creditors. The price you have to pay for financial freedom is the loss of your assets.

Chapter 13 bankruptcy, on the other hand, is less of a risk. If you want to keep your precious home and assets, you’re better off choosing this type of bankruptcy. Chapter 13 is otherwise known as “reorganization bankruptcy”. It gives income earning individuals an opportunity to repay their creditors over a period of 3-5 years. A structured repayment plan is created for these individuals to follow. Debtors also have the chance to retain their homes if they can keep making their payments on time.

If you want to gain more Chapter 13 bankruptcy information, consider browsing through the United States Courts website. You can also consult with an attorney in your area to learn more about the process and what it can do for you. The free initial consultation is also an ideal time for you to get to know the attorney better.

Commonly referred to as “reorganization bankruptcy,” Chapter 13 is designed for debtors that want to pay back their debts under a structured payment plan. As part of this plan, a debtor is permitted to retain their home and their other assets. Of course, there are some stipulations which are listed below –

• A debtor cannot file under Chapter 13 if, during the previous 180 days, a bankruptcy was dismissed due to missed court appearances or a court dispute.

• To qualify for Chapter 13, an individual’s unsecured debts must be less than $360,475 and their secured debts less than $1,081,400.

• Corporations and partnerships are prohibited from filing under Chapter 13.

• Any individual who wishes to file under Chapter 13 must complete court-mandated credit counseling within 180 of filing.

In addition to the criteria mentioned above, it’s also important that you are able to meet the terms of the payment plan, which will require that you receive regular income. Failure to meet the payments may result in your case being turned over to a Chapter 7 liquidation case. For more information on the benefits of Chapter 13, consider consulting with a reputable bankruptcy attorney in your area. Most firms offer free initial consultations, and these can be a great way to learn about what to expect before, during and after your claim has been filed.

Suppose you go to a grocery shop and after buying your items you just pullout your VISA card and pay, then you go to buy some clothes for this weekend’s party and pay the bill with the same credit card. Afterwards, you go to buy some milk and what you do? You give him your credit card as this has been your habit. You are surely going towards the right path of how to go bankrupt. The interest rates will very shortly crush you. And still, if you have something left with you, the creditors will do the rest!

Now let’s take another scenario- you are going to meet one of your friends and an unfortunate accident occurs to you, thus you are hospitalized immediately and you need quite a large amount to pay of your medical bill. But the worst part is you have no savings for these types of emergencies and you are under insured, thus you have to take loan with high interest rates. So sooner or later you are heading in the same path and answering the question yourself of how to go bankrupt! So emergency funds are very important!

If you are living in a house or using a car that you can’t afford, then such a lavishing lifestyle can lead you to enormous trouble. This type of extra spending is one of the main causes of bankruptcy. And now you can ask “How to go bankrupt?” And can answer the question from your own activity. You are actually an expert.

Do you use more than one credit card? Do you use them because the other ones are full and you still need more debts? This is a very common cause for the occurrence of bankruptcy. If you are also doing this then believe me, you can write a book on “How to go bankrupt in no time”. Most of them are using credit cards and not paying the bill causing the interest amounts to rise, and after a little time it’s reaching such levels that it’s becoming out of range of a middle class person. You must use the cards occasionally and must pay the bills in time; otherwise the snake called “bankruptcy” will catch you.

All in all, some of the common causes of bankruptcy and how to go bankrupt are discussed. So why not stop this growing disease together by acting smartly before it becomes so big that it goes out of reach of everyone. So just be a little careful about your own future and spend less and the rest will just follow…Lets stop it!