When most people think about bankruptcy, they think about it in terms of Chapter 7 or “straight bankruptcy” when you just “wipe out” or discharge debts. This fresh start sounds nice; however, this is not always the best answer for many reasons. If it is not the best answer, then, should you file a Chapter 13 debt consolidation? Filing a chapter 13 debt consolidation can help one resolve many issues. It can usually be filed with the court in a matter of days from the first time you meet with an attorney thereby relieving you of creditor harassment almost immediately in addition to stopping garnishments, lawsuits, repossessions and foreclosures. It may also be beneficial in actually lowering your monthly outgo of expenses.
Another issue most people don’t consider in the process of making the choice between filing Chapter 7 or Chapter 13 is whether they have health insurance. One concern with filing a Chapter 7 bankruptcy is that it may prevent you from declaring bankruptcy or being eligible for another bankruptcy discharge for a longer period of time. If you currently have no health insurance, filing a chapter 7 could be perilous to your financial future. If you were to suffer an accident or some other medical problem and you are not insured, you will most likely have some enormous medical bills. If you have filed a chapter 7 previously, you would be barred from bankruptcy relief for a longer period of time and would more or less be suffering collection harassment and possible garnishment from medical bills that you could not get relief from because of the chapter 7 you filed. This is a valid issue and an issue that is not often discussed; however, it is one that I and the other attorneys here at Bond and Botes do consider when advising our clients as we want to help you choose the best option to afford you the most long term financial help and relief.
If you would like to discuss which chapter of bankruptcy is a better choice for you, if any, please contact the office nearest you for a free confidential and private consultation with one of our licensed attorneys at your convenience.
Amy K Tanner is a shareholder in several of the Bond & Botes Law Offices. She holds a Bachelor of Science from Auburn University at Montgomery, and a Juris Doctorate from Thomas Goode Jones School of Law. She focuses primarily on consumer bankruptcy law in the Huntsville and Decatur offices.Read her full bio here.