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When someone files a Chapter 7 bankruptcy, the law states that they cannot re-file Chapter 7, or a discharge of almost all of their debts, for eight years. If an individual has amassed significant credit card debt during that eight-year period and then runs into financial problems again due to underemployment, unemployment or numerous medical expenses, they might consider filing Chapter 13 bankruptcy.

While some people manage to avoid credit card debt after a Chapter 7 bankruptcy, others believe they can manage their finances until an unforeseen situation, such as a job layoff, causes them to reassess their financial situation. The situation can cause extra concern if they have children or have a home they risk losing.

In Chapter 13 bankruptcy, the consumer can take from 36 to 60 months to repay none, some or all of their debt. Payments start as low as $100 per month, and while that amount might not repay much to creditors, it does offer some type of bankruptcy protection.

When a young family is at stake, the consumers should make every effort possible to save their home. Although they are dealing with phone calls from debt collection companies, they should focus on doing what they can to keep a roof over their head. This includes looking into a loan modification in order to avoid foreclosure and keep their home.

Financial problems and calls from creditors can overwhelm consumers who are already struggling. A bankruptcy lawyer might be able to stop calls from debt collectors, stop judgments and halt check garnishments. Retaining the services of a bankruptcy attorney might help the consumer decide to file a Chapter 13 bankruptcy or give them enough time to make them eligible to file a Chapter 7 bankruptcy.

Source: FOX Business, “Too Soon to File for Bankruptcy Again?”, Justin Harelik, August 14, 2013