A Chapter 7 or a Chapter 13: Which Bankruptcy Is a Better Option and What Are the Benefits?

Interviewer: What’s the true benefit of filing bankruptcy and how do I know if I qualify to file bankruptcy, either one 7 or 13? What would be that benefit once I’ve figured out which one I need to file?

Jeanne: We will come back to the Chapter 13 because I want to give you a little explanation on that but the benefit is like I said, a lot of people when I look at their budgets, they make enough money to support themselves. They make enough money to cover their expenses and that includes a house payment and a car payment.

A Chapter 7 Bankruptcy Is an Option If are Faced with an Unforeseen Medical Crisis and Have Accumulated Bills You Cannot Pay

But one of the problems is in some instances run up a massive amount of credit card debt. If you can walk away from $60,000 in credit card debt, that’s quite a bit of it. Medical bills can get totally out of control. I don’t know what the future is going to hold with medical insurance but I’ve had a couple of clients who were just doing fine in their own financial life.

They have a catastrophic medical event and actually most of the cases that I’ve dealt with, they have medical insurance but it didn’t cover that. The bills start coming in and the total’s $400,000 and they need the protection of bankruptcy to get rid of it.