using calculator

What happens if financial difficulties continue after bankruptcy?

Unfortunately, there is no magic wand Arizona residents can wave to make their financial difficulties go away. Sometimes, even after people file for bankruptcy to overcome their debt, they may find themselves facing financial problems once again. Unexpected situations arise, such as losing a job or diagnosing an illness, and finances may become strained dealing with new problems. Anyone who has filed for bankruptcy once before may not be aware of what options are available if hard financial times strike again.

First of all, it is possible to file for bankruptcy more than once. Debts can be discharged through Chapter 7 bankruptcy once every eight years. In addition to wiping out most bills and debts, Chapter 7 bankruptcy puts a halt to foreclosure proceedings while allowing the filer to retain possession of household furnishings. For those who have made ill-advised financial decisions and need relief sooner than that, filing for Chapter 13 bankruptcy may be one way to go.

Chapter 13 bankruptcy allows filers to repay their debt over a three-to-five year period. Based on their income, filers could repay some, all or even none of their debts. Even where payments are at a minimum, bankruptcy protection puts an end to wage garnishment and creditor harassment.

It is important for Arizona residents to understand the reason for their financial difficulties. Debt management and budgeting may be a solution in some cases. However, not everything is in a person's control and unforeseen circumstances can easily leave a person's finances reeling. Knowing the available options and speaking to an experienced attorney may be one way to alleviate financial burdens and begin on the path toward financial recovery.

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