The Power Of Bankruptcy

By Author: Brian Reed
Total Articles: 8
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If in these tenuous economic times, you have found yourself overwhelmed by financial difficulties, you may have heard big promises from companies offering a reprieve from all of your problems and worries. The only problem is, many of them can’t deliver. On the other hand, bankruptcy has power that is unmistakable. The only question that has to be addressed is what advantages do the different chapters of bankruptcy have for your situation. Here is a no-nonsense guide to the power of bankruptcy:

Eliminate Credit Card and Unsecured Debt

Many Americans have leaned on credit cards to get through tough times hoping for a better day in the future. If you have accumulated credit card debt that is greater than you can handle, bankruptcy can help. Both Chapter 7 and Chapter 13 have the ability to completely eliminate credit card debt, no matter the amount.

Bankruptcy can also eliminate unsecured debt. Unsecured debt is any type of debt that is not backed by collateral or other specific assets. Some examples include credit lines, department store cards, and heath club, cell phone or magazine fees.

Silence ...
... Harassing Collection Companies

If you are dealing with the stress of excessive calls from collection agencies, you are not alone. As the economy continues to recover from the recession, millions of Americans in debt are turning to bankruptcy as a solution to increasing financial pressure. Some are trying to negotiate with their debt collectors, but are not successful because of the intimidation tactics used by many of them.

Bankruptcy has the ability to do what no one can do on their own: shut down the collection companies. As soon as you file for bankruptcy, the phone calls, letters, and unexpected visits stop immediately.

Chapter 13 Can Stop Foreclosure

When you file for bankruptcy, you immediately receive an automatic stay, which tells creditors that they cannot collect on debts. The automatic stay is effective even in foreclosure, giving you an opportunity to restructure your finances in order to make payments again. With this plan, you have to prove that you will have enough income to support the repayment plan.

Chapter 13 Allows You To Keep Non-exempt Property

Chapter 13 is called the wage earner’s plan and allows people with a regular income to develop a plan for repayment of debt. Under Chapter 13, debtors propose a repayment plan to pay all or a portion of their debt over the period of three to five years, depending upon monthly income. So, under chapter 13 the time period is longer and debtors pay monthly payments to creditors similar to a debt consolidation plan, and the debtor does not give up any property.

Chapter 13 Can Reduce Secured Debts

If you owe more money on a secured debt, such as a home or vehicle, Chapter 13 allows you to reduce the debt on these assets and to discharge the rest. There are certain stipulations to this rule, so it is best to check with an experienced California bankruptcy lawyer who can assess the details of your situation.

If you are over-burdened with bills and cannot see any light at the end of the tunnel, bankruptcy may be the best option to help you get that much needed fresh start and allow you to rebuild your future.

The law offices of Borowitz, Lozano and Clark, LLP specialize in California bankruptcy and exclusively represent debtors in Consumer and Small Business Bankruptcies. They have helped over 20,000 families get free from the burden of debt since 1997. Call today for a free debt consultation at 1-800-509-3200.

Heather Preston. California bankruptcy lawyer - To get in touch with a California bankruptcy lawyer who will take your case from start to finish, contact the attorneys at Borowitz and Clark at blclaw.com.