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Understanding Your Options and Bankruptcy

After the economic crash of 2008, along with continuously unstable or otherwise unpredictable changes in the housing market, stocks, and bonds system; many individuals often continue to find themselves going 'under water' or accruing unusual amounts of debt in which they can't pay off or back in time. Also, of course, this is not to exclude those whom simply just spend above their budget on a regular basis and have accrued outstanding debt to 'the point of no return', not to exclude school loans, automobile payments, property repossessions, and even wage-liens in some cases!

Although it may seem difficult, impractical, or simply unfair to reflect or claim that one determining-variable alone could cause someone to 'go under' and be in a position in which they either are eligible - or are seeking eligibility - for declaring bankruptcy, it is not unheard of for such scenarios to arise. One example of such an - understandably relevant - scenario would be that in which an individual or family suffers a great economic hardship or shift of finances and budget due to an unexpected health related injury, illness, disease, or disability. While it's, understandably, advisable for families to set aside an emergency-savings to prepare and protect themselves from such instances, it's also understandably why and how so many average lower to middle class citizens are also living paycheck to paycheck to-date.

Breaking down and understanding the differences between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy is significant, and shouldn't be thought of as 'complex'. In fact, understanding Chapter 7 Bankruptcy could be simply put as a financial measure (surrender) in which you apply for approval of from the government, typically reserved for those whom are unemployed - which follows with a liquidation of nearly all of ones belongings to pay off any and all debtors - while extending 'forgiveness' or credit not otherwise issued to the remaining debt outside of this consolidation measure.


Chapter 13 Bankruptcy on the other hand is fairly similar, except it draws more of a focus or 'guarantee' that one can keep their home or other valuables throughout the course of declaring bankruptcy - barring they successfully broker a deal, typically within a court settings - with each of their debtors over the course of the next 3-5 years on average, for paying off said-debt.

Before moving off the topic of Chapter 13 Bankruptcy, it's worth noting the strong similarities to this, in comparison to your own independent ability—or through a financial advisor or lawyer - to essentially reach out to your debtors and attempt to do the same thing, before making a decision so big that will have the potential to leave a negative mark or stigma on your credit report for the next 8-10 years, or more.

It's important to understand that both of these forms of declaring Bankruptcy have the potential of negative long-term effects on your credit report, ability to be employed in some places, and again is not a guaranteed solution for just anyone that stumbles across the idea or term.


Many people might see declaring bankruptcy as a way of getting out of or from underneath all of their debt, yet while you can’t re-file for bankruptcy for at least 6 years in-between, it's worth considering the reality as to whether or not even through successfully achieving bankruptcy if you'd have learned your lesson, changed your ways, financial habits, and spending—or would you continue to live about your means, accruing bills and debt far above your means or reach?



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