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How can bankruptcy help discharge debts?

On Behalf of | Oct 28, 2015 | Personal Bankruptcy |

It is hard to believe that fall is upon the residents of Garnerville. Soon snow will begin to fall and the holiday season will be underway. While many people enjoy the winter celebrations of Christmas, Hanukkah, Kwanza, and many others, some people fear what the gift-giving season will do to their finances. The holidays can be a challenging time for people with money troubles who for many reasons cannot reign in their spending and find themselves facing significant debts.

Whether a person is facing financial peril due to credit card debt, medical debt, or other forms of unpaid monetary obligations, he has options for taking control of his finances. This blog has previously discussed different forms of personal bankruptcy; this post will review two common forms of personal bankruptcy that can help consumers discharge debts.

In a Chapter 7 bankruptcy, a debtor is permitted to sell off or liquidate items of property that he owns. Once all of his debts and creditors are brought together and a sale of his assets is completed, the proceeds of the sale are used to satisfy his outstanding obligations and bring him closer to financial stability. Chapter 7 bankruptcy does offer debtors some protections for their homes and other possessions, but not all parties will qualify for this form of personal bankruptcy.

In Chapter 13 bankruptcy, a debtor reorganizes his finances in order to come up with a plan to pay off his debts. Creditors may agree to reduce a debtor’s obligations if they are provided a guarantee that they will receive a portion of the debts that are due to them. Like Chapter 7 bankruptcy, Chapter 13 bankruptcy is subject to some limitations, and interested parties may speak with their legal counsel about their eligibility for filing.

The holidays should be a relaxing, stress-free time. This is not the case for some New Yorkers who face financial challenges. To learn more about available options under personal bankruptcy, consider consulting with a local bankruptcy attorney.

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