For many people, the word "bankruptcy" means a desperate last resort by someone who is down on their luck and struggling to pull themselves out of dire financial straits. The stigma surrounding bankruptcy is pervasive and real ... and totally untrue. The truth is that bankruptcy is an effective financial management tool, a viable alternative for good, hard-working people burdened with more debt-and more stress-than they can handle. Simply put, it gives people a fresh start.
We counsel our clients on which approach to bankruptcy fits their needs. The United States Bankruptcy Code consists of two chapters that concentrate specifically on personal bankruptcy-Chapter 7, also known as "straight bankruptcy"; and Chapter 13, which creates an affordable plan for repaying debt.
These forms of bankruptcy work differently, but they have one thing in common-the "automatic stay." When someone requests bankruptcy protection, any lawsuits, repossessions, foreclosures, and wage attachments are stopped. In a Chapter 7, most of the debt is wiped away/discharged and in a Chapter 13, the debtor and their attorney can create an effective, manageable plan for repaying debt. A Chapter 13 is an effective tool to save your house and/or your car even if you have fallen behind on your monthly payments.
A client can use Chapter 7 bankruptcy to eliminate certain types of debt, including but not limited to, credit cards, personal loans, payday loans and even some taxes. Debtors can file a Chapter 7 and still keep their house, car, retirement accounts and other personal property.
With a Chapter 13 bankruptcy, the debtor establishes a plan-in accordance with bankruptcy laws-to repay creditors over a period of time. A debtor may choose to file a Chapter 13 to get caught up on a mortgage or car loan without the threat of foreclosure or repossession. A Chapter 13 may also allow you to completely remove a second mortgage or any other secondary liens on your house.
If you'd like more information on how bankruptcy can help you, visit us at www.pmcelaw.com or call us at 302-358-2679 to set up a consultation with Tiffany A. Poole.
With our combined 50 years of experience in bankruptcy law, the attorneys at Poole, Mensinger, Cutrona & Ellsworth-Aults give you personalized, caring counsel to address your situation, to alleviate debt, and just as important, to give you peace of mind.