Seeking Relief from Overwhelming Debt, Foreclosure & Creditor Harassment
Being a debtor in today’s economic climate can be difficult, to say the least. If you are dealing with overwhelming debt, are faced with foreclosure or are being constantly contacted by creditors to the point of harassment, you may be considering bankruptcy as a way out. Bankruptcy may be able to offer you a solution to all of your debt-related problems, enabling you to reorganize and pay off your debt or eliminate your debt once and for all.
Chapter 7 Bankruptcy
With Chapter 7 bankruptcy you may be able to eliminate your debt within as little as 4 to 6 months. This type of bankruptcy is generally advantageous for debtors with lower income levels who do not have a good deal of property that needs protection through the bankruptcy process. To qualify to file under Chapter 7, a debtor must first pass the means test. The debtor must make less than the median income level in the area to qualify, or, if the debtor makes more than the median, they must pass a second part of the test that involves an evaluation of their disposable income. The means test is used to determine whether a debtor has the ability to make regular payments under a Chapter 13 repayment plan.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy involves a reorganization of debt and a repayment plan that may last 3 to 5 years, depending on the debtor’s financial situation. Chapter 13 bankruptcy offers several unique benefits to a debtor. In addition to protecting all of a debtor’s property through the entire process, Chapter 13 bankruptcy protects co-signers and may actually enable a debtor to save his or her home from foreclosure by including past due payments and penalties in the repayment plan. A repayment plan will be created based on the debtor’s disposable income (income minus necessary expenses), and once the plan is complete, any remaining debt will be discharged.
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