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[GRAPHIC: Milwid & Schlosser, P.C. Chapter 7 Bankruptcy]

CHUCK SCHLOSSER: Chapter 7 bankruptcy is part of a federal statute designed to protect people from their creditors. As soon as you file a Chapter 7, creditors have to stop all collection efforts. Once your case is approved, the court enters a discharge order that cancels all your debts.

PETER MILWID: Ninety percent of the people that contact our office qualify for Chapter 7. Chapter 13 is generally more applicable to people of higher income groups. A person needs a bankruptcy when the payments on their debts exceed their income. It's simple arithmetic.

Oftentimes in this situation, people continue to borrow to stay current with their debts, which we call the robbing Peter to pay Paul syndrome. All this does ultimately is provide more debt which eventually is overwhelming.

CHUCK SCHLOSSER: In terms of the consequences of bankruptcy, the effects are not damaging as the collection agencies would like you to think. Many of our clients report that they are getting new credit immediately after their bankruptcy is approved.

[GRAPHIC: Milwid & Schlosser, P.S. (720)251.2594 http://www.milwidschlosser.com/]