Before you file bankruptcy, it’s important to evaluate all of the options available to you. Those options may include Chapter 7 bankruptcy, Chapter 13 bankruptcy and debt consolidation.

Here is an overview of how those three options work:

• Chapter 7 bankruptcy offers 100 percent discharge of medical debts if you are eligible. It also allows you to discharge other types of debt such as credit card debt.
• Chapter 13 bankruptcy allows you to reduce your outstanding debts to an amount you can afford to repay over a three- to five-year period. Any debt remaining at the end of your payment plan would be discharged. Chapter 13 bankruptcy is a good option if you are not eligible for Chapter 7 bankruptcy or if you have assets you would lose in a Chapter 7 bankruptcy filing.
• Debt consolidation may be an option for some people who do not wish to file bankruptcy. However, debt consolidation or negotiation may be costly and not offer the relief you need. Any debt that is forgiven would be considered taxable income by the Internal Revenue Service.

Before you take any actions, it’s important to discuss all your options with an experienced attorney. An option that works for one person may not be the best option for another. Hammond & Hammond, P.C. in Jonesboro offers a free initial consultation to discuss your situation.