Bankruptcy
If you are under financial stress, a Chapter 7 or Chapter 13 bankruptcy may allow you to reorganize your personal finances, catch up on your mortgage and car loans, and discharge -- eliminate personal liability for -- unpaid medical bills, credit cards, and most other unsecured debts. It will stop collection activity, including garnishments, lawsuits and pending foreclosures, even if a judgment has been entered against you, with a few limited exceptions.
Chapter 7 is usually best for people who have a lot of unpaid credit cards, medical bills, and other unsecured debt, but not a lot of assets. A Chapter 7 filing will stop collection activity and harassment, including pending lawsuits and wage garnishments, even if a court has entered a judgment against you. Upon successful completion of a Chapter 7 and order of discharge, you are no longer obligated to pay any debt that existed before the bankruptcy, with a few exceptions such as student loans and recent taxes.
Chapter 7 may also be an option for people who have a mortgage or car note, but are current on their payments and wish to discharge their unsecured debt. Whether you qualify for Chapter 7 protection will depend on your individual financial circumstances.
Chapter 13 is a "repayment plan" bankruptcy. It may allow you to keep your home and car even if you are behind on payments and being threatened with foreclosure or repossession. Under Chapter 13, you propose a court-supervised payment plan based on your monthly income, living expenses, and assets. If you are able to continue making regular payments on your secured debt and catch up on the arrearages over three to five years, and the court approves the plan, you may keep the property.
At the conclusion of the Chapter 13 plan, most unsecured debt that is unpaid will be discharged. Whether you qualify for Chapter 13 protection will depend on your individual financial circumstances.
Call for a consultation at 985-892-7222.