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.

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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.

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Get started Ask a Lawyer a Question You'll hear back in one business day.