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Chapter 13 bankruptcy one option for repeat filers

While most people who file for bankruptcy in Massachusetts usually promise themselves that they never will allow themselves to get in such dire financial straits again, many Massachusetts residents, along with those in other parts of the country, may unfortunately find themselves having to file a second or even third bankruptcy for reasons that are not entirely within their control.

This may be easy enough for those who find themselves in need another bankruptcy discharge after sailing along just fine financially for decades; however, financial hardship can strike people for a second time quickly and suddenly, such as in the case of an unexpected job loss or a medical emergency.

Unfortunately, bankruptcy requires that debtors space out their bankruptcies for a certain period of time. Most debtors who file a straight Chapter 7 bankruptcy must wait eight years before filing another Chapter 7 bankruptcy proceeding.

However, for those who need to file a bankruptcy before that eight-year time period has expired, they may be able to avail themselves of a Chapter 13 bankruptcy, under which they can take advantage of the shorter waiting period between bankruptcies.

Should they choose to file Chapter 13 bankruptcy, however, the debtors should be aware that unlike a Chapter 7 bankruptcy, a Chapter 13 bankruptcy proceeding requires that debtors repay something toward their debts each and every month for three to five years. While this amount can be quite affordable, it still requires that people wishing to file this type of bankruptcy have some regular source of income.

While many people who file bankruptcy in Massachusetts may try to avoid the lengthier process of a Chapter 13 bankruptcy, sometimes it is the best option for people who find themselves facing financial hardships for a second time. In this situation, it is important to fully evaluate your options and choose the best course of action for you and your family.

Source: Fox Business, "Too soon to file for bankruptcy again?" Justin Harelick, Aug. 14, 2013