When your credit card and other bills become so overwhelming that you are having to figure out what to pay and what to let lapse, it might be time to consider your options for reducing the debt loan. You mustn’t fall for scams and shams when you are in this position. Instead, you need to look into the legal ways to handle your debts. Bankruptcy might be the answer to your problem.

People who need to file for bankruptcy protection will need to look into the requirements for the type of case they want to pursue. For most consumers, there is the working man’s bankruptcy, which is Chapter 13, or liquidation bankruptcy, which is Chapter 7.

In Chapter 13, you would make payments to the bankruptcy trustee to pay off all or most of the debts you owe. While you don’t make those payments in Chapter 7, your nonexempt assets are liquidated to cover some of the debts you owe. Once your case is over, it will be discharged. At this time, the debts included in the case will be forgiven if any balances remain. You expect Chapter 7 to be over much faster, usually in three to six months. The repayment plan for Chapter 13 usually lasts three to five years, so the case can’t be discharged until then.

Both types have specific requirements. For example, you can’t have income and assets over a specific amount for Chapter 7. You have to be able to make payments to the court and can’t have debts over a certain limit for Chapter 13. While this might seem confusing, it isn’t when you work with someone who is familiar with the laws governing this type of financial protection.