Get a New Financial Start with this New Year

Posted by Kevin on January 21, 2018 under Bankruptcy Blog | Comments are off for this article

The beginning of a year is a good time to take stock of yourself.  People routinely make New Year’s resolutions about diet, exercise, going back to school.

Are your debts getting out of control?  Worried about harassing telephone calls from debt collectors?  Getting sued?  Wages being garnished?  Now is the right time to do some financial assessment.  Bankruptcy may be the right tool for you to put your financial problems in the rear view mirror.

A New Start with Chapter 7

With Chapter 7 “straight bankruptcy” you get a new start very fast. As soon as your case is filed most of your creditors can’t collect their debts against you. They can’t go after your money or your property. Then usually about 3-4 months later the bankruptcy court enters an order discharging your debts. As quick as that, you become debt-free. The only exceptions would possibly be debts you want to keep and special debts you can’t discharge under the Bankruptcy Code.. Debts you might want to keep could include a vehicle loan or home mortgage. Debts you can’t discharge include recent income taxes, unpaid child and spousal support, and criminal fines.

A New Start with Chapter 13

With Chapter 13 “adjustment of debts” the new start is more nuanced, but sometimes much better.

Just as with Chapter 7 your creditors can’t take any action to collect their debts as of the moment you file your case. But under Chapter 13 that protection from creditors lasts not just a few months but for years. You finish your Chapter 13 payment plan in  3 to 5 years. Whatever debts you have not paid off get discharged. The final discharge of debts happens much later but in the meantime you can get many benefits unavailable under Chapter 7. You can deal in creative ways with special debts like home mortgages and car loans. Same thing with income taxes and child support arrearages that can’t be discharged. Plus you get protection from collection actions against any co-signers that you don’t get under Chapter 7.

 

Don’t kick the can down the road.  Take control.  We are available for consultation.