| Sometimes life throws a curve ball, and despite well-intentioned efforts to predict the future, financial ruin lies dangerously around the corner. Oftentimes individuals face unexpected medical problems, loss of employment, the death of a financial contributor to the family or some other devastating event. This can precipitate extreme financial burdens that are difficult to overcome.
If you qualify, the bankruptcy court can offer you protection from harassing creditors, garnishments, repossessions, evictions and foreclosure.
Chapter 7 (Straight Bankruptcy or Liquidation of Assets)
For individuals with predominantly unsecured debt (debt, such as credit cards, medical bills and utility bills, that are not secured by personal or real property) and with little equity in a house or automobile, Chapter 7 bankruptcy may allow you to completely eliminate unsecured debt while allowing you to keep your home and car. You must be current on your mortgage and car payment to qualify, and you must not own more than $4,000.00 in personal property to protect your assets. Chapter 7 bankruptcy can also allow an individual to surrender burdensome secured debts (debts, such as a house, car or furniture, that are secured by personal or real property) to seek a fresh start in life.
Chapter 13 (Wage Earner or Reorganization of Debts)
For individuals with regular income, including earned pay, social security, or a pension, Chapter 13 bankruptcy may allow an individual who is behind on mortgage and automobile payments to submit a plan of repayment over up to a 5-year period to allow a lesser restructured payment through the Chapter 13 Trustee’s office. It can also allow an individual to protect substantial assets, and formulate a plan of repayment without having to surrender those assets. Chapter 13 bankruptcy is designed to allow immediate relief from the burdensome demands of creditors, and to provide an individual with breathing room to restructure his or her debt. |
