Personal bankruptcy law is often the only protection for an individual or a married couple who has acquired debt from medical expenses, credit card purchases or any other unsecured loans and have found themselves in a position of not being able to satisfy those debts. Bankruptcy is not the end of a person’s credit worthiness, contrary to public opinion, it is a new beginning.

Personal bankruptcy law is divided, for the most part, into two chapters. These are Chapter 7 and Chapter 13. We can determine by a simple test which one would benefit you the best and which, if any, do you qualify for.

• Chapter 7 requires the liquidation of assets of the debtor to pay off the creditors. Because it is usually the choice of individuals or married couples who have little or no assets beyond the everyday necessities, such as their primary home, vehicle, furnishings and clothing, there is nothing to liquidate. These candidates have little or no money left to make payments on unsecured debt after paying their day to day living expenses. Under chapter 7 almost all unsecured debts can be discharged and/or completely eliminated. Tuition loans secured by the Federal Government are one of the exceptions. To qualify as a candidate for chapter 7, an individual or a married couple must pass a “means test” to determine their income to debt ratio. They to have a meeting with a qualified credit counselor prior to filing. The process is swift and debts are discharged within a few months. During this “stay” period, creditors are forbidden to contact the debtor.
  
  
• Chapter 13 is selected in many cases for persons that have equity in their home or other property and desire to retain it. They have a steady income and are making their living expenses but are having difficulty meeting obligations for credit cards and other unsecured debts. Under chapter 13 an individual or married couple can keep their assets and a reasonable payment plan of 3 to 5 years is made to a trustee and distributed. The plan is agreed upon between the debtor and the trustee. Creditors are forbidden to contact the debtor during the 3 to 5 year period. This is referred to as the “stay” period as in chapter 7.

Personal bankruptcy law may be a good choice if you have debts incurred through (by) medical expenses, credit cards, taxes, and/or other unsecured debt. Give us a call right away without waiting. We will stop the calls from collectors and get you a fresh start in rebuilding your damaged credit. If you are trying to make the minimum payment on a large amount of debts it will take ten years or longer to pay it off and your credit will be damaged anyway. We will show you how, after bankruptcy, you can repair your credit in a few years or even less.