Bankruptcy and Debt Reorganization

Bankruptcy allows you to regain control over your personal finances. Millions of people use bankruptcy to rebuild their lives from the financial turmoil that can follow divorce, job loss, identity theft, medical bills, or disability. The most common options for a consumer debtor are Chapter 7 and Chapter 13.

Chapter 7 gives consumers a fresh start and wipes the slate clean. Chapter 7 wipes out unsecured debts such as credit cards, medical bills, old utilities, repossessed vehicles, and even judgments. Chapter 7 was created for those who cannot repay their debts in a timely fashion without putting a serious financial strain on themselves and their families.

Chapter 13 is a consolidation bankruptcy, which basically creates a payment plan for you to pay the bills back over time. Chapter 13 immediately stops foreclosure of your home and repossession of your vehicles.

The new bankruptcy law that was passed in 2005 includes a means test, which is a formula to determine whether or not the consumer should have enough money available to make some minimal payment to creditors in a Chapter 13 bankruptcy plan. An individual must pass the means test to be eligible for Chapter 7 relief.

With either Chapter 7 or 13, the bankruptcy laws typically allow you to keep your home and vehicles. Both Chapters allow you to begin rebuilding your credit immediately, which is essential to making major life purchases such as a home or a car.

It is vital that you have an experienced bankruptcy attorney to fight for you through this process. Contact LaRoche Law at 978 632-1633 for a consultation today.