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Report: Those who file for Chapter 13 see better income, health

Many Arizona residents think of bankruptcy as a last resort, or as the end of the line, but in fact for many people bankruptcy can represent a new beginning. Chapter 13 bankruptcy, in particular, can be a good way for people to return to financial health without undergoing extreme measures.

A recent report suggests that people who have filed for Chapter 13 have much better finances for years after the filing, and are able to stop foreclosure or other difficult consequences of debt. The report, by the National Bureau of Economic Research, is preliminary, and has not yet been peer-reviewed. However, if its findings can be corroborated, the report could be very important in convincing people struggling with debt to consider filing for Chapter 13.

For the report, researchers studied the lives of people who had filed for bankruptcy protection for several years after the filing. They found that those who had filed for bankruptcy, and Chapter 13 in particular, had greatly improved lives in the years after the filing. Incomes rose by $5,500 per year. Home foreclosure rates dropped by as much as 20 percent. There was even a drop in the mortality rate during the five years after people filed for bankruptcy.

Again, these findings are preliminary, and the final report may change the numbers. However, the preliminary report helps point out a very important fact: Life goes on after bankruptcy. In many cases, people who have got out of debt through Chapter 13 or other forms of personal bankruptcy find themselves relieved of great burdens of stress. They can learn from the process of paying down their debt through Chapter 13 and minimize their debts in the future.

Arizona attorneys with experience in debt relief and bankruptcy law can help those struggling with debt to understand their options. Whether it's Chapter 13 or some other plan, debt relief strategies can help people get back to financial health -- and perhaps physical health, as well.

Source:, "Infant Mortality, Post College Jobs And Chapter 13 Bankruptcy," Andrew Flowers, Sept. 30, 2014