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Understanding which type of bankruptcy may be best for your situation

The past few years have been difficult for millions of people across the country. While the Great Recession is finally believed to have passed, many people are still feeling the pinch. Money may be tight, with no end in sight to financial difficulties. Whether facing unemployment, foreclosure, medical debt or overwhelming credit card payments, continuous and long-lasting financial hardship is still a reality for a great deal of Americans.

Many Kansas residents have already sought help for financial difficulties, and continue to do so. According to the American Bankruptcy Institute, there were 9,775 non-business bankruptcy filings in our state in 2011 alone. While for some, filing for bankruptcy can seem like the last resort, many others are realizing that this may be a viable option instead of continuing to languish in debt. However, deciding which type of bankruptcy is best for an individual’s situation may seem complicated.

The two main types of personal bankruptcy

Mainly, individuals and families file for one of two different types of bankruptcy. Each type can offer significant financial relief, while both have specific restrictions and benefits. A general rule to remember is that either type of bankruptcy will remain on a person’s credit report for several years. While this is no longer the stigma that it used to be over a decade ago (due to a largely increased amount of people filing for bankruptcy), it’s important to realize that taking this option should not be considered lightly.

People considering bankruptcy should weigh each option carefully. The American Bar Association says that a person can only file for a Chapter 7 bankruptcy once every eight years. Also, during a Chapter 13 bankruptcy, much of a person’s disposable income will be used to repay debts during the repayment period.

How an attorney can help

Filing for bankruptcy is not the end of the world as many people may think. While this period may be difficult and can come with tight restrictions, thousands of Kansas residents have discovered this option is preferable to struggling with financial problems. An experienced bankruptcy attorney can help you decide which option is best for you.