Sometimes, filing bankruptcy is the only option left for people who have lost
jobs or have gotten sick and cannot pay bills. If a person feels that filing
bankruptcy is his or her only option, he or she should look at the different
methods available. For example, Chapter 7 bankruptcy wipes out debt while
Chapter 13 is a reorganization. Only the person considering filing bankruptcy
and his or her bankruptcy lawyer can determine which method is better. A bankruptcy lawyer
can review a person’s situation and help them decide which way is best for the
situation.
Under Chapter 13 reorganization, a financial affidavit is
filed. It is determined how much money is left over at the end of the month, and
that money is paid to the trustee. It then is dispersed to the creditors. Bills
are paid, but the filer ends up only paying a percentage on each dollar owed.
With Chapter 7, debt is completely wiped out. While it may seems Chapter 7 is a
more attractive option, reestablishing credit after filing Chapter 7 is much
harder than after filing Chapter 13.
The free
Bankruptcy Worksheet
is a good place to start for anyone considering the legal issues
surrounding personal or business bankruptcy. Or, you can
find a bankruptcy lawyer to help you with credit and bankruptcy legal information so you can decide on the right bankruptcy filing.