You may face bankruptcy because of many factors, such as the loss of a job, mounting medical bills from a surgery or injury or credit card debt that outpaced your wages. While Chapter 7 bankruptcy may allow you to start over once you sell your assets to pay your debtors, filing this type of bankruptcy, along with a repayment plan with Chapter 13, could help you further resolve your debt.
Bankrate notes that while filing Chapter 7 is not possible for eight more years once you file initially, using Chapter 7 and Chapter 13 within several years of each other could help erase long-term debt issues.
Filing Chapter 7 and Chapter 13
While you can use both Chapter 7 and Chapter 13 at the same time, which combines both into a Chapter 20 bankruptcy, there are a few restrictions. For example, you must file Chapter 7 first and you will not receive a discharge as you would with a basic Chapter 7, as you are using both at the same time. There are several advantages to Chapter 20, however, such as gaining some time to pay off debt while the bankruptcy status protects you from harassing phone calls and letters from your debtors.
Filing Chapter 7 after Chapter 13
If you choose to file Chapter 13 bankruptcy first, which can help you reorganize your debt, you must wait at least six years to file Chapter 7 if you still have trouble or cannot find a steady source of income. If you want to protect your home, then you may want to file Chapter 7 first, as this gives you at least five years to catch up with any missed payments.
Most types of bankruptcy do not allow for the discharge of student loans or alimony debt. You may remain responsible for these debts, even after filing for several different types of bankruptcy.