Bankruptcy wipes out some debts but it doesn’t wipe out all debts. When you are looking into bankruptcy you will want to know what kind of debts you have and what kinds of debts will and won’t be eliminated by bankruptcy. Some of the debts that a bankruptcy will be able to eliminate are credit card debts, medical debts and unsecured debts. In a Chapter 7 these debts will be discharged (wiped out) but in a Chapter 13 you might have to pay back some if not all of your debts. These two chapters are both ways to get out of debt, they just go about getting rid of the debt in a different way. It will depend on the kinds of debts you have and how much you owe that will determine which one you will be eligible for.
The types of debt that a bankruptcy will not be able to get you out of are child support and alimony obligations, student loan debt (except in limited circumstances), and it is difficult to discharge tax debts or other debts deemed non dischargeable. Bankruptcy can be your starting point to get out of debt and to start over financially. Regardless on which type of bankruptcy you file you will have to complete credit counseling courses to help you to better know about how to handle your debts in the future.
Bankruptcy is usually seen as a last resort but sometimes it is one of the only options you have in order to get ahold of your financial situation. It is definitely not something to be taken lightly or a first course of action. It can be a solution for those people however who are in serious financial debt. Before you consider bankruptcy as an option to get out of debt you should ask yourself a few questions including will filing give you a better financial situation in the next few years? What will I loose if I file bankruptcy? and What will I gain by filing bankruptcy. Working with a seasoned bankruptcy attorney will be the best way for you to determine the answers to your questions.