Bankruptcy is a federal legal process that discharges or restructures debts. Chapter 7 (liquidation) wipes out most unsecured debt — credit cards, medical bills, personal loans — in 3-6 months; you'll lose non-exempt assets. Chapter 13 (reorganization) creates a 3-5 year repayment plan to pay back a portion of debts while keeping property. Chapter 7 stays on credit reports 10 years; Chapter 13 stays 7 years. Bankruptcy is a tool of last resort but isn't financial death — many rebuild credit within 2-4 years. Student loans, recent taxes, alimony, and child support are typically non-dischargeable.
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Bankruptcy
August 22, 2026 · Aditya Gupta
Personal Finance
Related terms
ACH Transfer
ACH (Automated Clearing House) transfers move money electronically between US bank accounts via the ACH network — direct…
Adjustable-Rate Mortgage
An adjustable-rate mortgage (ARM) starts with a fixed introductory rate (typically 5, 7, or 10 years), then adjusts…
Auto Loan
An auto loan finances a vehicle purchase, with the car serving as collateral. Standard terms run 36-84 months;…
Automatic Bill Pay
Automatic bill pay is a service that pulls funds from your account on a scheduled date to pay…
Balance Transfer
A balance transfer moves credit card debt from a high-interest card to a card offering a 0% promotional…
Bank Run
A bank run occurs when many depositors simultaneously withdraw their funds, fearing the bank will fail. Banks operate…
