There are many reasons that people may accumulate more debt than they are capable of repaying. A change in employment status can be very damaging. Unexpected medical bills can be a drain on a person or family. Some people just don’t understand budgeting well enough at a younger age, and get caught in a debt cycle. For these and others, the only option is often to undergo the bankruptcy process. Bankruptcy is a situation where people surrender many of their assets and some potential future income to square their debts. This process typically results in people paying back less than their full debt amount, but it does have a damaging impact on a person’s credit score and future ability to borrow money.
Bankruptcy information. Many people think bankruptcy just happens when you are broke and out of money. This is actually a process which allows people to work and rearrange or purge their debt. Bankruptcy isn’t a magical get out of debt free card. Many assets must be sold. There are different types of bankruptcy for different financial situations. Some end with zero debt at the end, while others maintain a manageable level of debt without being as damaging to a person’s future credit rating.