Is Bankruptcy The Right Choice To Help You Resolve Your Financial Problems?

John Andrew Comerford

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Bankruptcy Attorney

Contributor Level 7

Posted almost 4 years ago. 1 helpful vote

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1

How Can A Chapter 7 Bankruptcy Help You?

Credit Card Debt is considered "unsecured debt." A Chapter 7 Bankruptcy is specifically intended to help people in financial trouble by eliminating such unsecured debt. By listing your credit card debt in your petition the Bankruptcy Court will grant total relief - TOTAL RELIEF - from all of your your credit card debt! It sounds unbelievable, but there is no catch and no trick. The Federal Government understands that without help, Americans have the possibility of spending the rest of their lives as slaves to exorbitant interest rates from credit card companies. Hospital bills are another form of unsecured debt. Even a short stay in a hospital can cost far beyond the capacity of most people to pay. Chapter 7 Bankruptcy can eliminate those hospital bills entirely. Lawsuits, judgments and wage garnishments are also stopped, and even certain tax debts can be eliminated. Bankruptcy is the Federal Government's solution to help Americans avoid becoming trapped in an endless circle of debt

2

How Can A Chapter 13 Bankruptcy Help You?

Get behind in your mortgage payments and you will soon be in the situation that thousands of other Americans have faced since the end of the "subprime loan boom." First comes the notice of default, and then the foreclosure sale that takes your house. However, there is an alternative available to you. If you have enough income that you can continue to make the normal payments on your home and also make up the payments you missed, the Bankruptcy Court will give you the protection you need to get current on your house payments over a 3 to 5 year period. You can even carry on with a loan modification during the process! If the fair market value of your home is less than the amount you owe on your first mortgage, a Chapter 13 Bankruptcy gives you the chance to absolutely ELIMINATE ANY SECOND LIENS YOU MAY HAVE ON YOUR HOME! Stripping the second lien can give you the extra income you need to pay those first mortgage arrears and get current, thus allowing you to keep your house.

3

How Can A Chapter 11 Bankruptcy Help You?

Chapter 11 Bankruptcy is famous for large companies which have gotten into financial trouble and need to reorganize and make a fresh start. It is the equivalent of Chapter 7 or Chapter 13 bankruptcy, but for businesses. Rather than allowing these business to simply dissolve, a Chapter 11 allows them to reorganize their assets, their systems and their management, and move things around so as to give them a chance to adapt to changing economic circumstances. They come out of their bankruptcy as a leaner, more efficient organization, able to succeed in their business. What is less commonly known is that Chapter 11 may also be used by individuals who have wealth which is over the limit for Chapter 13 Bankruptcy. Whereas Chapter 13 has limits both for secured and unsecured debt, Chapter 11 allows unincorporated individuals who have a higher level of assets and interests, such as people who own a number of rental properties, to reorganize, get productive, and protect these assets.

Additional Resources

Comerford Law Firm

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