A proceeding in U.S. Bankruptcy Court that may legally release a person from repaying debts owed. Credit reports usually report bankruptcies for 10 years.

• Chapter 7 Bankruptcy: A type of bankruptcy often called total liquidation. This is because the debtor (person filing bankruptcy) turns over ALL non-exempt property (i.e. credit cards, unsecured debt, etc) to the bankruptcy trustee who then converts it ALL to cash to pay off the creditors owed. This gives the person a "fresh start" because it lifts all liability and burden owed to that debt once bankruptcy is discharged. This bankruptcy legally stays on a person's credit profile for 10 years after the date of petition as a public record, but credit accounts included remain for 7 years after the date of petition or date of delinquency; which ever transpired first.


• Chapter 13 Bankruptcy: This category of bankruptcy can also be called "Reorganization" because this a form of a re-payment plan for debts owed over a period of 3 to 5 years. Persons with non-exempt property to which they would like to keep (i.e. home, multiple vehicles, etc) and have sufficient income to repay the debts owed are the persons to whom this appeals most to. Chapter 13 bankruptcy remains as a public record for 7 years after the date of petition or date of delinquency; which ever occurred first.