Deciding to File for Bankruptcy, Now What?

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Deciding to File for Bankruptcy, Now What?

If you are considering filing for bankruptcy, don't worry. You aren't alone. Although it isn't the ideal situation, it can be incredibly useful for helping you get back on your feet. Many people have found that after biting the bullet, they regain control of their finances over time.

Filing for bankruptcy can:

  • Halt all of the calls from debt collectors
  • Resolve debt lawsuits
  • Prevent wage garnishment
  • Improve your finances in a matter of months


The first thing that you must understand is that it is vital for you to find a qualified bankruptcy lawyer to guide you through this complicated process. One wrong move could cause you to have to restart the process after a waiting period. The failure rate is over 90% for those that file individually, but with a lawyer, the failure rate drops to roughly 5%.  When you are going through the many struggles that debt creates in your life, you'll be thankful to be working with someone who can greatly improve your odds of approval. Furthermore, most bankruptcy attorneys are happy to offer free consultations.


The next thing that you must understand is that bankruptcy is actually broken into different types. They each serve different purposes and have specific requirements. The two that we will look into here are Chapter 7 and Chapter 13.

Chapter 7

This is the most common type of bankruptcy, and sometimes it is referred to as "liquidation." It forgives unsecured debts and it is the fastest method. If you have credit card debt, medical bills, or personal loans, then this is probably the best option for you.


  • Your income, expenses, and disposable income must past the means test
  • No past Chapter 7 within 8 years, no past Chapter 13 within 6 years
  • No dismissed bankruptcy petition filed within 180 days

Chapter 13

This option is for restructuring payments for a 3-5 year plan and is often called the "wage earners" bankruptcy. When someone just wants to get current on assets, such as a mortgage or some other expensive item, this method can be particularly helpful.


  • Regular income
  • Current on taxes
  • No past Chapter 13 within 2 years, no past Chapter 7 within 4 years
  • No dismissed bankruptcy petition filed within 180 days

Even if you have debt that cannot be discharged (which might be child support, maintenance, student loans, certain types of tax debt), by filing bankruptcy, you will get rid of other debt and free up your income to pay down the rest. If you are still unsure about which method is best for you, be sure to consult with a bankruptcy lawyer. Their help will be necessary anyway, but at least now you can be a bit more informed about the options that are available. Go here to find a qualified lawyer near you.


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