What types of problems can a bankruptcy case solve?

• It helps someone get a fresh start by eliminating their credit cards, medical bills and other types of debt. An individual who is overburdened and overwhelmed just by making the minimum payments can often file a Chapter 7 case and wipe out their credit card debt, medical debt and other debts. You must speak to a bankruptcy attorney to determine if this is the Chapter you should file.

• It can help to save a home or other real property from being foreclosed on by the lender, or to save a car from being repossessed, or to release a bank account from being frozen by a judgment creditor. People who have fallen on hard times and missed several mortgage payments, car payments and other payments  may be able to file a Chapter 13 case. A Chapter 13 bankruptcy case may be used by an individual, who has regular income, to pay back debt over a period of time, with a payback period of up to five years, and is often used by debtors who seek to save their house or other real property from foreclosure. An individual who has experienced some financial hardship and has fallen behind with their mortgage payments, car loan payments and such can make these “arrears” payments each month to their bankruptcy trustee in accordance with a Chapter 13 Plan that their attorney files with the bankruptcy court. 

• When a debt consolidation company just isn’t helpful because their upfront fees are usually figured into your repayment first and foremost and their minimum payment is just not affordable for you. A Chapter 13 can also be used purely as a Debt Consolidation tool. If you are unable to pay your debts because the minimum payments are unaffordable to you, a Chapter 13 case will alleviate the numerous payments that you are making to several creditors by combing them into one monthly plan payment. It allows the Debtor a repayment period, usually up to five years. A Chapter 13 bankruptcy can be viewed as personal reorganization because in a Chapter 13 proceeding, you deal with ALL of your debt obligations at once. You consolidate all of your payments into one Trustee payment which you make each and every month. It also makes all of the late fees, overlimit fees and interest rates STOP! You must  first speak to a bankruptcy attorney to determine if this is the Chapter you should file.