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We have covered many Chapter 7 and Chapter 13 bankruptcy cases in previous posts. Many Miami residents make the difficult decision to file bankruptcy every year and many people are confused about the differences between Chapter 7 and Chapter 13 bankruptcies. An experienced Miami bankruptcy attorney can help explain the differences between the various bankruptcy and debt repayment options available and counsel a client on what bankruptcy option is best for the client’s particular goals and situation.

Deciding to declare bankruptcy is not an easy decision and it is important not to file bankruptcy without the help of a knowledgeable legal professional.

“Bankruptcy often indicates what is happening in your personal life more than what’s going on in the overall economy,” said Kim McGrigg, manager of community relations for nonprofit Money Management International. “When people can’t think of anything else, that is when they think of bankruptcy.”

Chapter 7 bankruptcies are the most common types of personal bankruptcies. Under a Chapter 7 bankruptcy a person’s unsecured debt such as credit cards are discharged. Debt acquired within 90 days of your filing isn’t discharged however. This is to ensure that soon-to-be bankruptcy filers don’t go on shopping sprees. A Chapter 7 Bankruptcy will allow a person to keep his or her home but remains on credit reports for about 10 years.

Chapter 13 bankruptcies allow those with jobs to consolidate debts and pay off all or part their debts. This option can help individuals get a handle on out of control debt and stop harassing collection calls.

“Although there are downsides to bankruptcy, keep in mind that it is the right option for some people,” said McGrigg. “For some folks there just isn’t going to be a scenario in which they can pay off their debts.”

Source: Chicago Tribune, “Understanding bankruptcy,” Andrew Leckey, Nov. 25, 2011