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Posted by on Sep 27, 2012 in Debt, Protecting the Nest Egg | 0 comments

On Debt and Bankruptcy

On Debt and Bankruptcy (in a Nutshell)

Credit card, medical and other debt causes San Diego seniors no small measure of grief.  If you can’t repay your debt, you simply can’t expect sympathy from creditors. Even if an account is decades old and you’ve essentially paid back the principal debt many times over, creditors do not consider your present hardship.  They will harass, intimidate and take all legal measures to collect your dues.   Fortunately, we are not left to the wolves.  Bankruptcy protection is available to eliminate the debt and the overwhelming stress it causes.  Bankruptcy is almost always the most cost-effective means of canceling your debt.

What is Bankruptcy?

Bankruptcy is a complex but powerful legal mechanism (provided for in the United States Code Title 11) to permanently get rid of debt AND keep your property. Chapter 7 Bankruptcy and Chapter 13 Bankruptcy are the primary avenues for the consumer and small business-person to obtain comprehensive freedom from back-breaking debt.

What’s the Difference Between Chapter 7 and Chapter 13 Bankruptcy?

Chapter 7 Bankruptcy is a quick (usually 3-month) process; you walk away from your debt without making any payments. If you have way too much stuff, then some things may be sold for repayment of (some) debt. That is rare; California protects the property (assets) of almost all persons who file chapter 7 bankruptcy. So, when I’m asked, “Can I keep my home?” or “Can I keep my car?” the answer is almost always a definite yes.

Chapter 13 bankruptcy is a debt repayment plan. You make monthly payments (for 36 to 60 months). Usually, you end up paying pennies on the dollar; the unpaid-for balance gets canceled (discharged). Chapter 13 bankruptcy also lets you lower car payments and– get this… remove your second mortgage or equity line. Payments are suited to your budget and designed to be affordable.

Can I File Bankruptcy?

Eligibility and benefits from bankruptcy are time sensitive.  Therefore, it’s important to explore one’s options without delay, before one loses property to creditors.  A no-obligation consultation with a qualified bankruptcy attorney can answer your questions.  An attorney can advise whether you’re eligible for bankruptcy and apprise you of any risks involved, so you may make an informed and timely decision.  He can also walk you through the process, so you’ll know exactly what to expect.

In sum, if you cannot repay your debt without sacrificing your welfare, then there is no need to suffer.  Bankruptcy can offer a powerful and cost-effective solution.

By San Diego bankruptcy attorney Asaph Abrams, from The Law Office of Asaph Abrams.

If you wish to discuss a debt issue please call Elder Law and Advocacy at (858) 565-1392.

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