Bankruptcy FAQs What does it mean to file for Bankruptcy? Bankruptcy is a legal proceeding in which a debtor declares their inability to pay back their creditors. What are the different types of Bankruptcy? There are three common types of bankruptcy known as “chapters” in the U.S. bankruptcy code, Ch. 7, Ch. 11, and Ch. 13, each with varying criteria and consequences. How long does a personal Bankruptcy stay on your record? A Chapter 7 bankruptcy will stay on your credit report for 10 years, while a Chapter 13 bankruptcy lasts for seven years. What is the most common type of Bankruptcy? The most common type of bankruptcy is Chapter 7, also known as “straight” or “liquidation” bankruptcy. Why are Bankruptcies allowed? The general idea behind declaring bankruptcy is that it allows debtors a “fresh start” while offering creditors a way to receive some or all of their owed payment. About the Author True Tamplin, BSc, CEPF® Facebook Linkedin Instagram Twitter Youtube True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists. True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics. To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.