Top 5 reasons people filed for bankruptcy in 2016?

Top 5 reasons people filed for bankruptcy in 2016?

All too often people struggle with consuming debt for reasons out of their control.  While most individuals are aware bankruptcy exists, they are often unsure if they will qualify.  Often individuals wait far too long to seek an experienced attorney like Zellar & Zellar, Attorneys at Law, Inc., for guidance and advise as to what options are available.

Why Do People End Up in Bankruptcy?
Here are the five most common reasons why people find themselves seeking the assistance of an experienced bankruptcy attorney:

1. Medical Bills – The most common reason people get into financial trouble is because of mounting medical bills. In most cases, people encounter this problem through no fault of their own. It might be because of an accident or the onslaught of a serious disease or disorder that starts the bills coming in the door. Even with insurance, there is no guarantee every aspect of treatment is going to be covered, especially with large deductibles and co-pays. In the worst cases, the only way out might be bankruptcy.

2. Loss of Employment – In a competitive job market, the loss of a job can be devastating. With a large stack of bills sitting on the table, the pressure to find a new job is often intense. The more time that passes without a regular paycheck coming in the door, the closer an individual is going to get towards having to make difficult decisions related to their overall finances.

3. Consumer Debt – It doesn’t take long for people, who may have difficulty managing their finances, to find themselves in over their heads. Credit cards are so easy to get and use. In the wrong hands, credit card spending beyond one’s means can turn into a nightmare of growing debt with limited resources to make even minimum payments. As stress builds, bankruptcy becomes an attractive option.

  1. Major Life Changes Like Divorce – Divorce is the perfect example of a life-changing event that tends to create havoc in every aspect of a person’s life. With so many changes going on around them, bankruptcy is one way they can eliminate financial issues, allowing them to focus on other problems.5. Unexpected Expenses That Overwhelm – In life, things happen that are beyond one’s control. A natural disaster is the perfect example of how a person’s life can be turned upside down in the blink of an eye. Again, as the pressure mounts across many aspects of their lives, financial issues can be set aside through bankruptcy proceedings.

    The reality is there are a number reasons why the bankruptcy courts handle a million cases a year. If any of these reasons sound familiar, it is best to speak to the experienced counsel at Zellar & Zellar, Attorneys at Law, Inc., for a free consultation to discuss how bankruptcy may be the best available option for debt relief.

© Zellar & Zellar Attorneys at Law, Inc., 2016; All Rights Reserved.

Why hire Zellar & Zellar, Attorneys at Law if you are considering filing for bankruptcy in Zanesville or Coshocton, Ohio?

Why hire Zellar & Zellar, Attorneys at Law if you are considering filing for bankruptcy in Zanesville or Coshocton, Ohio?

If you have substantial debt and feel overwhelmed with the pressure associated with that debt, you may want to consider filing for bankruptcy. While bankruptcy tends to have negative reputation, bankruptcy code was actually designed to provide debtors with much needed fresh start.  Bankruptcy is a complex legal process, so it is crucial to work with an attorney who is familiar in this highly specialized field of the law.  If you live in Zanesville or Coshocton, Ohio, the experienced team at Zellar & Zellar, Attorneys at Law, can provide you one-on-one legal counsel for all of your bankruptcy concerns.

Two of the most common forms of bankruptcy filings for individuals include Chapter 7 and Chapter 13.  Both Chapter 7 and Chapter 13 have income and budget requirements that must be met in order to qualify.  The attorneys at Zellar & Zellar, Attorneys at Law, offer a free initial consultation to determine a debtor’s eligibility.  After the initial consultation, a detailed interview is scheduled with the attorney to ensure proper disclosure of all assets and liabilities prior to the filing of the case.

The most common misconception about bankruptcy is that you are likely going to lose all of your assets in order for your debts to be repaid.  By law, you are permitted to have certain assets exempt from collection. Ohio has its own specific list of exempt property that you are entitled to keep protected.  The attorneys at Zellar & Zellar, Attorneys at Law, will be able to identify that exempt property and can help you protect those assets from the bankruptcy. The purpose of these exemptions is to allow you to maintain sufficient property to provide for yourself after the completion of your bankruptcy case, so it is important to take advantage of all possible exemptions.

The bankruptcy process requires strict compliance with various rules and procedures. If you fail to follow these rules and procedures, you may run into serious problems, which could result in dismissal of your case. An experienced bankruptcy attorney will be well versed in these areas and can help ensure that your bankruptcy is filed and pursued correctly.

Both Chapter 7 and Chapter 13 cases require at least one court appearance.  Court can be intimidating for some, so having an experienced bankruptcy attorney in your corner can help provide greater peace of mind. A bankruptcy attorney will work with the Judge, Trustees and various creditors on your behalf to try to resolve your case as efficiently as possible.  The experienced attorneys at Zellar & Zellar, Attorneys at Law, are available to assist those who are considering bankruptcy. They can provide you with advice about whether bankruptcy should be considered in your circumstances. Call to schedule your free initial consultation today.


© Zellar & Zellar, Attorneys at Law, Inc., 2016; All Rights Reserved.


Can Chapter 7 Bankruptcy Get Rid of My Credit Card Debt?

Can Chapter 7 Bankruptcy Get Rid of My Credit Card Debt?

Ohio Bankruptcy LawyersChapter 7 bankruptcy affords a person a “fresh start” that discharges most of the individual’s debt. Some debts are not discharged in Chapter 7 though. Many people are aware, for example, that student loan debt cannot be discharged in bankruptcy as well as tax liabilities that are recently incurred.  Intentional acts that cause injury are potentially not dischargeable as well as embezzlement and theft in fiduciary capacity.   Credit card debt, medical bills and utilities as well as other general unsecured debts are a different matter, where several rules apply.

In general, credit card debt can be discharged in Chapter 7, unless it is jointly held and then the other person liable on the account must pay the debt to avoid collection.  Thus, co signed obligations are dischargeable but not to the co signer, who is then subject to collection for non payment.   Bankruptcy courts also may hold the petitioner responsible for debt associated with luxury purchases or large cash advances that are incurred shortly before the bankruptcy filing.

Credit card debts for luxury goods valued at over $650 and purchased within 90 days of filing are not automatically dischargeable and are subject to scrutiny, as are large cash advances prior to filing.   The creditor has the right to challenge those charges. If the debtor can show the “luxury” item was not really a luxury purchase, then the debt will be discharged. Also, if the petitioner can prove they intended to repay the debt, the debt can be discharged.   However, they may have to defend themselves in a lawsuit in the bankruptcy case if the creditor sues.  It may be better to just wait to file until the charges are over 90 days old.

The definition of a “luxury purchase” is left vague but certain common sense should indicate what meets the definition and what does not. Charging a transmission repair for example, and making a couple of payments, is different from ordering high-end winter clothing and missing the next two credit card payments.   The place where the charge is made (ie.,  Sachs 5th Avenue as opposed to Auto Zone) may also subject the charge to scrutiny as to the need for the particular item.  Likely designer clothes will never be a “need” prior to filing.

Large cash advances on a card may or may not be discharged in bankruptcy. An advance of more than $1000 made within the 90 days prior to filing for bankruptcy might not be discharged, unless the petitioner can show proof that they intended to pay off the debt. As with the luxury credit purchases, the law does not specify what counts as proof of intention to pay the credit card bill.

In short, most credit card debt can be discharged in bankruptcy. Petitioners who hold credit card debt jointly or who engage in certain buying behaviors will find their debt is not dischargeable in Chapter 7. In other rare cases, like a joint credit card, the debt may survive Chapter 7 as well.

If you are considering personal bankruptcy, we invite you to contact Zellar & Zellar Attorneys at Law to schedule your free consultation with an experienced Bankruptcy Practitioner who can fully assess your situation and advise you about your options concerning bankruptcy.

© Zellar & Zellar, Attorneys at Law, Inc., 2016, All rights reserved.

How can filing for bankruptcy improve your quality of life?

How can filing for bankruptcy improve your quality of life?

Bankruptcy is a major financial decision that will have a significant impact on the life of the Debtor and those who are jointly liable on their debts.   While it does impact those who are jointly liable on debts with the Debtor who files for bankruptcy, if they are repaid according to terms the impact is minimal.  This is especially so in light of the significant benefits that can be derived from a timely filed bankruptcy.  Below we will discuss a number of ways the life of the debtor and his or her dependents can be improved through debt relief under the bankruptcy code.

Stop Constant Collections Calls and Other Credit Harassment including Garnishments

When a person is overwhelmed with Debt and unable to pay their bills on time or in full they are besieged with collection calls on a robo dialing basis from the computer every few minutes all day long at home and at work and on their cell phones.  Often family members are also harassed who were listed as references on the credit application.  The harassment is disruptive to life and to work and is relentless from morning until night.  This is very stressful, as are lawsuits to collect and garnishments from your paychecks or banks accounts to pay the debt involuntarily.  Then a person has not enough to pay the monthly living expenses and disaster strikes financially.  Fortunately the bankruptcy code offers relief from all that .  The filing of a bankruptcy case invokes the Automatic Stay and prevents further creditor calls and or harassment including garnishments.   Debt collectors have to stop calling as soon as someone files for bankruptcy.

Have More Money at the End of Each Month

Bankruptcy can improve the quality of life by allowing the household to have increased monthly disposable income for living expenses and other costs of life.  Struggling to pay bills every month can force some people to go without necessities such as prescription medications that are important but costly. It might not be possible to buy food, pay for heating fuel or maintain a car when all the money goes to back debts or debt service. This causes everyone in the household to suffer the consequences of the debt including families and children.  It will become possible to start budgeting normally again and lead one to an improved standard of living through increased disposable income to pay expenses.  This may create income for activities for children or school related expenses such as field trips they would otherwise have to miss out on due to debt service.

No Threats of Wage Garnishment or Legal Action

Ongoing garnishments, judgment liens and the embarrassment of employer notification of a wage garnishment can jeopardize employment and destroy one’s peace of mind in addition to wreaking havoc on the monthly budget.  Creditors can take 25% of a persons net take home pay or ¼ of their net wages every pay for a wage garnishment.   This type of stress can lead to depression and anxiety and can cause one to lose their job by the disruption of their work routine and the constant calls and harassment.  Filing for relief under the  bankruptcy code  will stop these aggressive collection tactics by creditors and collection attorneys.  After the filing of a bankruptcy a person will not have to worry about wage garnishments or lawsuits to collect pre petition debts.

Start Rebuilding Personal Credit

Credit is very important today as it affects the interest rates you pay for credit and the amount you pay for car and homeowners insurance over your lifetime.  . Bankruptcy will allow someone to start rebuilding credit again which is why is it called a “fresh start.”   This can greatly improve the quality of life over time. Improving credit responsibly after the bankruptcy filing by timely paying debts makes it possible to  borrow money again on reasonable terms and maybe buy a new house or car. Good credit could even lead to higher paying jobs, lower insurance rates and better interest on credit cards.

Prevent Foreclosure and Keep the Home

A final way bankruptcy can improve quality of life is by preventing a foreclosure on a home or providing the borrower the chance to catch up on the mortgage arrearage or delinquency through chapter 13 reinstatement. The threat of losing a home and becoming homeless can be devastating. Filing for bankruptcy will stop banks from foreclosing on a house as it stays creditor activity during the case pendency. Chapter 13 allows them to reinstate and chapter 7 allows them to pay and keep it or surrender it and walk away.  Modification is still available.   The automatic stay stops the foreclosure while the case is open and chapter 13 allows reinstatement over time to stop the foreclosure.

Why hire Zellar & Zellar, Attorneys at Law, Inc. to help you file for Bankruptcy in Central Ohio?

Bankruptcy is often a last resort for many individuals who are experiencing financial difficulties, but the process of filing can be a complicated undertaking. There are some significant legalities involved with a filing for bankruptcy protection that the novice debtor may not understand, so having an experienced and effective bankruptcy lawyer like Zellar & Zellar, Attorneys at Law, Inc. of Columbus, Ohio can ensure that your bankruptcy case is prepared correctly and submitted to the Court for the best possible outcome for the Debtor and the least possible consequences.    The most important part of declaring Chapter 13 Bankruptcy is having a repayment plan that is actually workable within the filer’s family budget.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy cases are liquidation proceedings for individuals who do not have a lot of unencumbered assets and a lot of debt. . There are specific rules associated with what items can be deducted on the Means Test to qualify for high income earners, and as to what debts can be discharged in the chapter 7 proceeding.  Having an experienced firm like Zellar & Zellar Attorneys at Law, Inc., to represent you will ensure you get the best possible outcome from your case.  That means retaining as much of your personal property that you can and discharging as much debt as possible.   Chapter 7 filings are means tested, and your attorneys at Zellar & Zellar Attorneys at Law, Inc., can assure you that your calculations for repayment will be accurate and financially reasonable and that you have taken every allowable deduction to qualify.  Just because you fail the means test at the end does not mean you can not file for chapter 7.  You can still be eligible for a chapter 7 discharge even if you are above median income, if you pass the test upon completion of same.  An experienced practitioner like Zellar & Zellar Attorneys at Law Inc., can ensure you get the maximum allowable deductions for the eligibility determination.

Chapter 13 Bankruptcy

Everyone is not eligible for a Chapter 13 bankruptcy filing who has steady income to fund the plan.   Chapter 13 bankruptcy is designed to help the filer retain a significant portion of their personal assets, such as a home, cars and investment properties.  However, the debt repayment is based on the asset value.  Those who qualify will need a strong presentation of income and expenses to demonstrate feasibility of the plan. A chapter 13 repayment plan can often include making new agreements with creditors for a debt restructuring as well as still including some consumer debt that can actually be discharged. Zellar & Zellar can help you evaluate your situation and consider all assets and liabilities in a thorough and comprehensive manner to ensure you are getting the best possible outcome from your case with the minimum required payback.

Fresh Start
A successful bankruptcy filing will result in a fresh start for the filer, where they can begin rebuilding their credit score over time by responsible financial choices.  It enables one to wipe out existing debt to obtain that needed fresh start to rebuild and reestablish their credit.  Most filers are reestablished within twelve (12) months of timely payments on secured debts after a chapter 7 filing.  Zellar & Zellar Attorneys at Law, Inc., can help make sure you get the best possible result from your case in order to reach your goal of financial freedom and  a fresh start.

Why call Zellar & Barclay after being in an auto accident in central Ohio?

Automobile accidents that result in injury and/or property damage involve an at-fault party and a victim. Quite often, the victim does not receive proper compensation because he or she is pressured by the other party’s insurance company to accept a quick, unfair settlement. In central Ohio, victims of such an accident can rely on the professional attorneys at Zellar & Barclay to investigate thoroughly and present a compelling argument and compile the evidence necessary in order to negotiate a satisfactory settlement.

How Victims Can Be Cheated
The party deemed not at-fault may have been injured in the auto accident. Although the at-fault party’s insurance policy may provide the required liability coverage, the insurance provider will generally not conduct an in-depth investigation in order to truly compensate the victim.. Rather, it may take a glance at the police report and base compensation on a simple estimate of damages and medical expenses.

All too often, these settlement offers do not take into consideration all of the damages sustained by the victim, such as lost wages, medical expenses, mileage and transportation to the medical treatment and pain and suffering for the injuries suffered.  A few of these expenses include lost wages because of the inability to work, the cost of travel to distant medical treatment centers, and long-term therapy deemed necessary by the victim’s medical practitioner.

Worst of all, many carriers sell “state minimum coverage.”  Therefore, the at-fault party’s insurance coverage may be the state minimum permitted by law. If this is the case, a good portion of the costs for medical treatment may not be covered and likely there will not be enough insurance coverage for the victim to be compensated by the at fault carrier.  When this happens, the victim’s own insurance often has to respond to the loss under the uninsured or underinsured coverage of their policy, if there is any available.

Negotiating The Highest Possible Settlement
In central Ohio, traffic accidents are common in all urban areas. Severe accidents occur along interstate freeways in the Columbus area, on arterials, and even in front of residential driveways. Regardless of the weather, the time of day, or the type of vehicles involved, an at-fault party can usually be identified.

The problem comes in negotiating reasonable compensation as soon as possible. If the at-fault party and victim do not have adequate coverage and medical payments coverage under their respective policies, immediate compensation for medical costs is unavailable. .Reimbursement only occurs after settlement is accomplished or a lawsuit is filed and settled.

Zellar & Barclay, Attorneys at Law, Inc., is a law firm dedicated to negotiating the highest possible settlement for auto accident victims.  Settling for whatever the at-fault party’s insurance provider offers is never a good idea as the offer is not usually adequate to fully compensate the victim for their injuries and loss.  The legal system is in place to help victims, and the best way to get this help is to have competent legal help from the beginning. Call the attorneys at Zellar & Barclay today to schedule your free consultation concerning your auto accident claim.  We are here to help!

Top 10 Reasons People in Ohio will File Bankruptcy in 2015

With recent fluctuations in the U.S. economy, more people are struggling to make sense of their Ohio Bankruptcy Lawyersfinances. Ultimately many will end up filing bankruptcy. Here are the top ten reason why they do so.

Expensive Homes.

The dip in interest rates tempts many people to buy homes they cannot afford. Unfortunately they find out too late when they cannot meet the high monthly payments when adjustable interest rates start rising.

Also, most economists have warned that people who have taken out home equity lines of credit in the last ten years and have only paid interest on the loans will be facing the loans either coming due or adjusting to fixed rate installment loans.  This may also lead to another wave of defaults on real estate.

New Cars.

Instead of holding on to older model vehicles with lower payments or no balance, some will finance pricy new vehicles, given the tempting new features that are commonly available. Struggling to meet monthly payments can put them behind on other bills, so they file bankruptcy.

Minimum Wage Hike.

Higher wages should not lead to bankruptcy, right? But higher pay normally leads to higher living expenses and can cause a person to live beyond their means.  An increase in pay can be a great thing if when the pay check increases people work to live within the expenses they had when they were being paid less.

Glitzy Advertising.

New products are mushrooming in every category. Consumers are told they must have the best of everything, so they buy, and buy, and buy some more until their budgets are wiped out. The desire to have the newest phone, car, or clothes can lead to increased debt and financial demise.

Credit Card Overload.

Credit card offers are filling mailboxes every day. Incredible offers of zero interest for the first year or bonus bucks for spending a certain amount lure the naïve spender to rack up credit card debt and max out their cards. The only alternative at that point is to file for bankruptcy.

Financial Illiteracy.

Most people lack financial education or training. They don’t know how to manage money or live on a budget. Statistically, it is unavoidable that many will fall victim to their own economic mismanagement and end up bankrupt.

Failure to Pay Bills on Time.

Letting a bill slip by accident can happen to us all. But when it occurs frequently it can snowball into disaster for the financial stability of a family.  Once default occurs and interest rates are increased and default fees are added most often an individual because unable to afford or pay the mountain of cumulative bills.

Loss of Job.

Losing a job can jeopardize anyone’s budget. Unemployment is one of the most common reasons for bankruptcy.

Disability or Medical Leave.

Becoming disabled or taking an extended medical leave can reduce income and result in unpaid bills that can lead to bankruptcy.

Cosigning a Loan.

Becoming a cosigner for someone else’s loan can backfire if the person doesn’t pay. Being stuck with that debt may overburden the budget and lead to bankruptcy.  A good rule of thumb is that if you cannot afford to make the payment if your co-signer doesn’t then do not agree to co-sign the loan.  It is a common misconception that a co-signer does not have the same liability on a loan as the primary signer.  However, the co-signer is equally liable for the debt and in the case of default the creditor will attempt to collect it from both indivdiuals, normally focusing on the person who is the most collectible.

Why Is the Filing Fee going up for Filing Bankruptcy and When Is It Going Into Effect?

Even though consumers who file for bankruptcy are broke, they still have to pay certain fees associated with the procedure. The fees that a debtor has to pay include the fees for credit courses, the attorney’s fees, and the filing fees. The United States Judicial Conference has recently decided to raise the filing fees for consumers who are filing for bankruptcy after June 1, 2014. The reason is not clearly stated, although the rationale is that it has to do with the number of bankruptcy cases being filed each year.
New Bankruptcy Filing Fees

Several fees have been raised as of June 1, 2014. The filing fee for a Chapter 7 bankruptcy has gone up to $335. It was previously $306, which reflects a $29 increase. The filing fee for a Chapter 13 bankruptcy is now $310. The filing fee for a Chapter 12 bankruptcy is now $275. All three chapters have been raised by $29.

It Takes Money to Lose Money

Consumers who have are already strapped and struggling will now have to come up with more money to file a bankruptcy to eliminate their debts. Parties that wish to file for bankruptcy should contact an experienced attorney as quickly as possible to begin the process. With the changes going into effect on June 1, 2014, to file under the current filing fees a case will need to be filed by May 31, 2014.

Bankruptcy attorneys are available in all areas of Ohio and throughout the United States. An interested person can contact a reputable bankruptcy attorney today and schedule a consultation. The attorney will conduct the appropriate testing to decide what bankruptcy options are best for them and advise the client on how to proceed.

How Often Can I File Bankruptcy For Bankruptcy Relief?

How Often Can I File Bankruptcy For Bankruptcy Relief?

The right to file bankruptcy is found in Article 15 of the United States Constitution.  Bankruptcy laws are enacted by the Federal Government and are federal cases under federal bankruptcy laws.  . This means the statue for Ohio is the same as it is for the other 49 states, with certain exceptions.

The law has two chapters for personal bankruptcy relief, known as Chapter 7 Liquidation and Chapter 13 Reorganization.  For chapter 7, a person cannot have debts discharged under this chapter again until eight years after the date of filing of an earlier chapter 7 case under which a person received a discharge.  A person cannot seek relief under Chapter 13 for 4 years after filing under chapter 7 and cannot file a new 13 to receive a discharge unless at least 2 years has passed since a prior filing under which a discharge was obtained.

What is controlled by State Law is the exemptions to which a person is entitled because Ohio is an opt out state from the federal exemptions.  In Ohio, most people can retain most or all of their assets and receive a discharge under Chapter 7.

Federal law imposes median family income on debtors seeking relief, who have to complete a Means Test analyzing their income for 6 months prior to filing.  Median family income differs by State, and increases gradually by family size.  In Ohio, median family income for a single person is approximately $43,000, while median family income for a four family household is approximately $75,000. These figures are based on IRS guidelines and are updated periodically.   If your income exceeds this amount for your family size your case is subject to heightened scrutiny by the United States Trustee and you may have to file under chapter 13 if you make too much money.  But you can still receive a discharge under chapter 13!  See below for more information about chapter 13.

Under Chapter 7, a person is seeking a discharge of their unsecured debt and not to repay the debt over time.  The entire chapter 7 case takes approximately 120 days to complete, and a court appearance with counsel generally occurs about 30 days after filing.  A person is ineligible for another discharge under chapter 7 for a period of 8 years from the date of filing of the prior chapter 7 case.

Under Chapter 13 reorganization, a person is seeking a discharge of a portion of their unsecured debt and to repay certain debts for which they have pledged collateral which they wish to retain.   People who file for this type of bankruptcy either make too much money (over the threshold for chapter 7) or have assets they want to keep which they might lose under chapter 7, or to cure arrearages on things like child support and or income taxes, and reinstate on mortgage arrearages over time.  The Debtor, through counsel, proposes a budget they can live with and a payment to the court which will reorganize them over 36 to 60 months.  Once the plan is confirmed, the debtor makes monthly payments to the trustee who in turn repays the creditors the necessary about and a discharge of the remainder of the unpaid debt is discharged upon completion of payments under the plan.

Under chapter 13, a person can avoid and release an unsecured second mortgage and can cram down car loans because a person is afforded a broader remedy under chapter 13 than chapter 7.

If a person starts a chapter 7 case they can convert to chapter 13 if eligible for a discharge and if a person files a chapter 13 bankruptcy, they can convert this to a chapter 7 if they are eligible for a discharge under chapter 7.  Bankruptcy can be a wonderful opportunity to take responsibility for your financial affairs and get a fresh start needed for a positive financial future!

Why Bankruptcy?

Why Bankruptcy?

Sometimes, life throws a curve ball. The mortgage is late, the car payment has not been made, and the credit card companies call non-stop. It seems like there is no way out of a dark tunnel of debt. It can be scary and overwhelming for anyone. Being in a large amount of debt can feel like being in a prison. When it seems like there is nothing that can help the feeling of inadequacy, there is an option to help the situation; bankruptcy.

There are some common misconceptions about bankruptcy. Often, people believe that if they file for bankruptcy, they will lose all of their possessions. They believe that a repo man will show up at their front door demanding they hand over their house and car keys and provide him their bank account information. This is not always the case. Bankruptcy can be a lifesaver for many people. It is a viable option once other avenues of getting out of debt have failed. However, there are ramifications, and someone who is planning to file needs to understand the penalties that are involved.

There are several types of bankruptcy, but the most commonly used by individuals and families are chapter 7 and chapter 13. Chapter 11 bankruptcy is used for corporations that are in severe debt and is not typically an option for personal debtors. The type of bankruptcy will depend on the amount of debt one and their ability or inability to repay the debt. It is important to remember that certain types of debt cannot be forgiven. Typically child support, federal student loans, and tax abatements are not going to be discharged with bankruptcy.

Chapter 13 bankruptcy is like a consolidation plan. With a Chapter 13, the debtor with a steady income works with their attorney and trustee to develop a plan to pay back as much debt as possible. Chapter 13 bankruptcy is usually a three to five year process. There are advantages to filing for chapter 13 over chapter 7. Chapter 13 allows the possibility of stopping housing foreclosures, as long as the debtor continues to make the payments.

Filing for bankruptcy can be a drastic step, but bankruptcy can save the life of someone with a great amount of debt.