CHAPTER 7 BANKRUPTCY
This is a simple elimination of your debts. While some debts such as support obligations, recent taxes and student loans cannot be discharged, most debts can be. This includes credit cards, medical bills, car repossession claims and judgments. About 80% of the people who file bankruptcy file chapter 7. Most people who file chapter 7 do not lose any of their property or assets, but some cases require special planning to protect assets.
CHAPTER 13 BANKRUPTCY
For people who do not qualify for chapter 7 due to having a higher income or for who special protection is needed, chapter 13 provides a process to make payments over time without being bothered by your creditors. This includes taxes, back support debts, and student loans. In addition, if you are in foreclosure on your house, a chapter 13 will stop the process and give you time to pay the back amounts due. If a car has already been repossessed, a chapter 13 may allow recovery of the car. In some cases, you can even reduce the amount you have to pay to keep your car. Also, even if you have previously filed a chapter 7, you can almost always file a chapter 13 afterwards.
While many people think that student loan debt cannot be dealt with, there is hope for almost everyone. There are many options available. These options will depend on whether your loans are federal or private or both. Many repayment programs are available for federal loans, as well as some programs for total loan forgiveness. There are situations in which you may have a defense to repayment based on the school you attended. Even private loans can be dealt with in many situations. If these options do not work, a hardship discharge in bankruptcy court is sometimes possible.
Like student loans, many people think there is no hope and nothing can be done. The sooner you see an attorney, the better, but even if the IRS or the State of Oregon is garnishing you, it can be stopped. If you get in sooner it is possible to arrange repayment programs, or settlement offers. If your tax debt is old enough, it may be discharged by a chapter 7 bankruptcy. Even if it cannot be discharged by a chapter 7 bankruptcy, a chapter 13 bankruptcy in most cases will allow repayment without penalties or further interest.
If you think you are too far behind in your mortgage to ever catch up, or a foreclosure has been started against you chapter 13 bankruptcy will allow you up to 5 years to cure the problem. This may be just making up the missed payments, a loan modification or a sale or refinance of your house. Our office can provide help with a loan modification or representation at the state mandated foreclosure avoidance mediation conference.
If you have debt problems and for some reason are not able to or do not wish to file bankruptcy, our office assists in dealing with your creditors to make payment arrangements. If you have been sued, we can discuss defense of the case in court or settlement of the lawsuit. Many times all that is necessary is for you to know your rights and to verify that the creditors cannot collect money from you.
Please contact us for more information or to find out what we can do for you.