Filing for bankruptcy protection is a lot like having surgery – you worry about it and dread it but feel a sense of relief when it’s over. It won’t be on your list of ‘Top 10 Favorite Things’ and probably won’t be an item in the annual Christmas letter. But just like the surgery, the bankruptcy corrects a problem.
It sounds self-evident, but the reason that many people end up filing for bankruptcy protection is not enough money. Prior to 2005, almost half of all bankruptcies were caused by overwhelming medical expenses. Since 2005, the primary causes of bankruptcy are job loss, reduced income, credit card debt and unexpected expenses.
Previously, it was often a young adult who had spent too much on luxuries who declared bankruptcy. That is no longer true. Now, the average debtor declaring bankruptcy is middle-aged (or older) and earns less than $30,00 per year. They simply don’t have the money to handle larger than expected expenses. If increased expenses are accompanied by reduced income from a job loss or reduced hours, it’s too much.
The Bankruptcy Code was designed to help people like this. Approximately 2 out of 3 of these people will file under Chapter 7. This will discharge most of their debts (especially credit card and medical bills) and allow them to start fresh. Debts like child support will remain and have to be repaid, but without the credit card bills it will be much easier to do so. Many Chapter 7 bankruptcies are concluded in 3-4 months.
Those who file under Chapter 13 are more apt to be debtors who have stable incomes but are threatened with foreclosure on their homes. Chapter 13 sets up a repayment plan with creditors over 3-5 years. The debtor will repay negotiated balances and past-due mortgage payments while staying current on mortgage and other monthly bills. While Chapter 13 takes much longer than Chapter 7, it will allow a debtor to keep his home, if he/she chooses.
An experienced Bankruptcy Lawyer in Villa Rica GA can explain the complexities of the Bankruptcy Code to area residents struggling with debt. Daniel M. Barnes and Associates have been serving and advising fellow Georgians with their legal problems since 1992. If you need to stop collector calls, foreclosure or wage garnishments, contact this experienced Bankruptcy Lawyer in Villa Rica GA and find out how to get a fresh start.