Make A New Year’s Resolution To Get Out Of Debt

Resolve To Get Out OF Debt

If you are struggling financially, you likely have been struggling for a number of years. It is very easy to fall behind on credit cards, get hit with unexpected medical expenses, and experience a job loss or other traumatic event in your life which could lead to debt. For many people, they suffer throughout the years trying to manage the debt, juggling which creditor to pay as well as deciding what necessities to do with or without. The good news is that for many Americans, there is an option to eliminate debt or reorganize debt over a three to five-year repayment plan for less than what is owed. What I’m talking about is chapter 7 and chapter 13 bankruptcy as provided under existing Federal laws. As we come to the end of 2015, if you or someone you know is struggling financially, this may be the opportunity to make a new year’s resolution to eliminate your debt once and for all.

The Chapter 7 Option

For 75% of the people reading this article, chapter 7 will provide the best form of relief. Chapter 7 is available for individuals and couples who have very little in the way of assets and a fair amount of debt. Chapter 7 will eliminate most debts including credit cards, medical bills, personal loans, past-due utility bills, auto repossessions and other miscellaneous debt for different types of services. Debts that will remain under chapter 7 include student loans, recent taxes, parking tickets, child supports and maintenance payments. Additionally, most chapter 7 filers will retain all of their personal property under the existing exemption laws in the state of Illinois. This means that someone who has a car or a home can typically continue to pay the outstanding mortgage payment and the outstanding monthly car payment and keep the items. The individual does have the ability to surrender those items in full satisfaction of the debt should he or she chooses to do so. New Year Photo

The Chapter 13 Option

For 25% of the people reading this article, chapter 13 will provide the best form of relief.  Chapter 13 is a way to reorganize debt and repay it over three to five-year period through a chapter 13 trustee. The amount that you pay and for how long depend upon a number of factors including your income, your expenses, your assets and your liabilities. Chapter 13 is commonly used to save a home that’s in foreclosure. It allows the homeowner to stop the foreclosure process and begin to repay the arrearage portion over a three to five-year period. The homeowner also gets to make the current mortgage payment which the lender had been refusing since the debtor fell behind. Chapter 13 also allows an individual to protect his or her driver’s license from suspension based upon parking tickets. The city of Chicago has been quick to boot and impound vehicles based on the fact that the owner has incurred a series of tickets. Chapter 13 allows for a repayment of as little as 10% of the total amount owed to the city Chicago over a period of 3 to 5 years. During this payment plan, the debtor is protected in that his license cannot be suspended provided he does not incur any new debt for parking tickets after the case is filed.

Talk With A Bankruptcy Attorney

As you can see, chapter 7 and chapter 13 both provide an incredible amount of relief which is available under existing Federal laws. The state of Illinois dictates how much property you can keep while going through the process. If you speak with a bankruptcy attorney in the next several weeks, you can ensure that during the first quarter of 2016, you will have relief with either chapter 7 or chapter 13 under the United States Bankruptcy Code. I would advise that you sit down and talk with a bankruptcy attorney in your area who can advise you as to which chapter is best for you and as to the process. You may find that by taking action at 2015, you will clear the way for a more prosperous and financially rewarding 2016 and beyond.

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