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Chapter 7 & Chapter 13 Bankruptcy Options to Stay in the Game
When life throws you a financial curveball, how can you stay in the game? How can you get back to your feet, shake off the dust, and dig in for the next high and inside brush-back from the game of life?
Most Americans are honest, hardworking people. They juggle precious resources to pay their mortgages, buy groceries, keep gas in their cars and sacrifice their own needs and wants to send their kids to college. Often, budgets are tight and people manage to get by only when everything, everyone, and the economy are working together smoothly. Then, when one of life’s financial curve balls breaks out of nowhere, like a COVID-19 pandemic, job losses and closed businesses, you may suddenly have to duck for cover.
Managing Your Debt
Job loss, unemployment, unexpected illnesses, catastrophic medical bills, inadequate or non-existent health insurance, divorce, foreclosures, evictions, lawsuits, judgments, garnishments, high-interest loans, crushing credit card debt, a volatile stock market, depleted savings and withdrawn retirement accounts – these are a few of the reasons why people are suffering and struggling to survive.
Absent a winning lottery ticket (we discourage even legalized gambling) or a rich uncle to provide a bailout (Uncle Sam?), people ought to be aware of some sensible solutions for managing debt. Communication with lenders and other creditors is important. Reasonable payment arrangements or compromise settlements can often be negotiated if both sides act in good faith. Interest rates can be lowered, loans can be extended and payments lowered, or even deferred if both sides cooperate. Although debtors should be aware that cancellation or forgiveness of debt may have income tax consequences.
But when the creditors and their collectors choose to play hardball by making unreasonable demands, threatening or filing lawsuits, repossessing cars, seizing secured property and foreclosing on homes, people can either panic or step up to the plate and take control of their financial future!
Call a Time-Out
The Automatic Stay that goes into effect upon filing a bankruptcy petition stops collection action by creditors. A Discharge of Debtor forgives most debts and essentially knocks your bills out of the park. A court-approved Chapter 13 Plan to pay your mortgage arrears over a period of time, keeps the banks in the bullpen, and your home safe from foreclosure. Slide into the next inning of your life safely and free from unwanted debt.
The Bankruptcy Code, and in particular, Chapter 7 and Chapter 13, offer opportunities to obtain a discharge (forgiveness) of certain debts while retaining and protecting exempt property from creditors. For people within certain income limits, attorney Greg Martucci may recommend a Chapter 7 bankruptcy. This can provide a discharge of unsecured debts and “fresh start” in as little as four months.
For those who may not make the income limitations to qualify for a Chapter 7, or have more property than they can protect from creditors, but don’t want to lose it, a Chapter 13 may be recommended. Through a Chapter 13 bankruptcy, people can sit down with their attorney, prepare and propose a plan to repay all or some of their debts over a period of time, usually within 3 to 5 years, while retaining (or surrendering) their possessions and keeping their home.
Call Martucci Law at 630-980-8333 today to schedule your free initial office consultation. Learn more about bankruptcy options available to both individuals and businesses, who have have been knocked down by a financial curve ball, but are not back on their feet.