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Is filng Chapter 7 or Chapter 13 bankruptcy the right choice?

Though many consumers in Florida and all around the country have recently seen some positive changes in the economy, there are families that are still struggling to make ends meet. Some may have experienced a job loss, while others may face a mountain of unpaid bills. While certainly not the first solution, some residents realize that filing for Chapter 7 or Chapter 13 bankruptcy may help them more quickly recover financially.

The Federal Reserve reports that at the end of 2017, the country had over $13 trillion in household debt. This total includes over $1 trillion in credit card debt, $1.2 trillion in car loans, $1.4 in student loans and $8.8 trillion in mortgages. According to the nation's Trustees Program, over 700,000 individuals and businesses are projected to file for bankruptcy relief in 2018.

Student loans are not likely to be discharged in a bankruptcy. However, other consumer debt may be eliminated or lessened through bankruptcy. Chapter 7 bankruptcy mainly involves liquidating one's assets to pay back creditors. Chapter 13 bankruptcy is designed for individuals with a regular income who can make payments to creditors over time. Another factor in determining which type to file involves income level.

Those considering filing Chapter 7 or Chapter 13 bankruptcy should contact a Florida lawyer to discuss their options. An attorney familiar with bankruptcy laws can provide valuable assistance in determining how to proceed and which type of bankruptcy is the right one. While deciding to file for bankruptcy should not be taken lightly, consumers often find that the decision is often the first step in the process of getting their finances back on track.

Source: CNBC, "For some consumers, bankruptcy is the solution to crushing debt", Sarah O'Brien, April 11, 2018

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