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Chapter 7, 13 bankruptcy may provide needed debt relief

For the average consumer, finances and debt constitute some of the greatest stresses in life. However, debt may be a much larger issue for one person versus another. Those who are facing a sizable amount of debt may benefit from either a Chapter 7 or Chapter 13 bankruptcy filing in Pennsylvania.

A person may file for Chapter 7 bankruptcy in circumstances where his or her income or assets are simply insufficient to meet the financial obligations. This filing involves liquidating the assets and paying off creditors, while getting all other unsecured debt formally discharged. This is helpful for those with hospital bills they can’t pay, as well as collections and credit card debt. Student loans usually can’t be alleviated through a bankruptcy filing, at least under current laws.

A Chapter 13 bankruptcy is available for those who don’t meet the requirements of a Chapter 7 bankruptcy filing or otherwise have a plan to reorganize their debt under the supervision of the Bankruptcy Court. Once the court approves a Chapter 13 filer's repayment plan, payments are made over a period of three and five years. The plan helps to keep creditors off one’s back and a trustee appointed by the court sees that the required payments are made pursuant to the plan.

A person’s credit report includes bankruptcy for several years -- 10 years for a Chapter 7 and seven years for a Chapter 13. Nevertheless, bankruptcy may be the best option for those that feel as if their debt is swallowing them. Being in debt can quickly reduce a person’s quality of life and prevent consumers from achieving other financial goals. Getting massive debt discharged through bankruptcy essentially allows a person in Pennsylvania to become achieve a fresh financial start so as to chart a more secure course for the future.

Source:, "The difference between Chapter 7 bankruptcy and Chapter 13 bankruptcy", Lashawn Brown, May 23, 2014

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