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Choosing between different types of bankruptcy requires a degree a
familiarity with Chapter 7 and Chapter 13 law. Depending upon the
financial history and nature of debts of each individual, each chapter
provides different benefits and restrictions. For the most effective
bankruptcy help, advice from local attorneys and law firms provides the
most accurate information available. Each court must follow local rules
and follows local traditions. Local attorneys are best suited to compare
the cost of filing bankruptcy to the probability reorganization and/or
discharge will solve debt problems for their clients.
Types of Bankruptcy for Consumers
Approximately 98% of all cases are filed under Chapter 7 or Chapter
13. For consumers and average wage earners, these chapter are cost
effective and offer a wide assortment of options and alternatives for
federal debt relief. Qualification for each chapter is different, as are
the requirement for discharge. In general terms, Chapter 7 offers quick
bankruptcy results for the lowest cost. Chapter 13 requires repayment of
at least a portion of debts owed over 3 to 5 years, with discharge of
remaining balances at the completion of the plan. Past due payments on
the date of filing are treated much differently under Chapter 7 and 13,
with Chapter 13 offering the widest range of options.
All too often, financial difficulty and divorce go hand in hand. When
spouses disagree on the necessity of filing, one spouse may file alone.
Special problems are created however, if one spouse chooses not to file.
After separation, but before divorce, filing will resulting in reporting
bankruptcy on spouses credit report. For a spouse who maintains all
payments current, the effect can be devastating and restoring credit
after bankruptcy reporting difficult. Similarly, after filing bankruptcy
and landlord tenant disputes, a separated souse will have difficulty
renting, leasing, or buying a new home. Also be aware that women's
legal advice and men's legal advice may be different when child custody
issues are involved. Divorce legal help must be considered in
connection with all filings. Trustees may question the necessity of
filing alone, but seldom question the necessity of filing medical
bankruptcy when debts owed are far beyond any reasonable means of
repayment.
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