Different Types Of Bankruptcy

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.