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Bankruptcy, never thought it would be you, right?
Most people filing BK’s these days never thought it would happen to them. They had good jobs, always paid their bills on time, and were the friend or family member that others always came to for help. Then it changed: job loss, medical issues, or credit card companies suddenly changing interest rates or debt limits. These are events that none of us can control but must adapt to and move on as best we can. So forget feeling guilty or embarrassed. Instead, learn about bankruptcy and what it can do for you.
It may be time to consider bankruptcy if you are:
- Harassed by creditors
- Paying one credit card with another
- Using cash advances to pay the bills
- Struggling to make your mortgage payments
- At risk of losing your home to foreclosure
- Making only the minimum balance on your credit cards
- Dipping into retirement accounts, like IRAs and 401k loans, just to make ends meet
- Trying to save your home with a loan modification or HAMP program
- Late on vehicle payments or fearing repossession
- Losingmoney to awage garnishments
- Sued for credit cards debt, repossessed vehicles or debts
- Late mortgage, car or tax payments
- Experiencing job loss, work furloughs, pay cuts and discontinued unemployment compensation
Chapter 7 - liquidation
If you are having financial difficulties and are unable to pay your bill, filing a chapter 7 can help. It is known as the fresh start bankruptcy because you are asking the court to “discharge” as much of your debt as possible. It is important to know not all types of debt are dischargeable. Domestic support obligations, student loans and some taxes and co-signers or guarantors of debt may still be liable. In return for no longer being personally liable for that debt, you agree to keep only basic property, such as a house, car, household items etc., up to a certain value. If there are liens on those items, you must continue to pay those obligations if you want to keep it. These items are “exempt” or protected. If you have other items that are “non-exempt” property, you may be required to turn them over to your case Trustee who will sell it and use the money to pay your creditors.
I can help you understand this fine line between protected and unprotected property and will spend time reviewing this critical area of law with you so you know what to expect, what is at risk, and how a chapter 7 may impact you and your family.