Bankruptcy’s Fresh Start

Filing bankruptcy can be an emotional decision. No one likes to admit that they lost control of their finances. Often to no fault of our own, we have lost the ability to keep up with our payments. Reasons can be:

• Loss of a job
• Lay off or cut back in hours
• Unexpected medical bills
• Death or divorce of the primary financial provider
• Illness

Fortunately for debtors with no options of catching up on all their debt, bankruptcy is a legal way to eliminate all qualifying debt. The bankruptcy process can give you a fresh start, a financial do-over so you can stay on top of your obligations.

Chapter 7

A Chapter 7 bankruptcy is usually for those with a large amount of unsecured debt, like credit cards and medical debt. Chapter 7 discharges the unsecured debt in three to six months. This type of bankruptcy is usually the fastest and most common.

Chapter 13

A Chapter 13 bankruptcy is for those with debt that has collateral, a secured debt like a home or vehicle. This type of bankruptcy allows you to catch up on your late and missed payments over three to five years. You will need to continue to make your home and car payments if you wish to keep using the collateral. At the end of your court-approved payment plan, any remaining eligible unsecured debt will be eliminated.

Non-Dischargeable

Some debt is non-dischargeable no matter what type of bankruptcy you file. Alimony, child support, current taxes, and court-ordered restitution and fees will not be discharged. It is also tough to get student loans discharged in bankruptcy.

If you would like more information on how to get a fresh start, contact a Citrus Heights bankruptcy attorney.