When dealing with overwhelming debt on a daily basis, concerns about a family home or car to get to and from work can be exceptionally stressful. For individuals faced with that situation, it is important to be familiar with bankruptcy protections options and how they can help them enjoy debt relief and, in some instances, can also protect a family home or car.
Falling behind on home or car payments can happen because of job loss or for other understandable reason. Personal bankruptcy options may provide individuals in that situation with a fresh financial start, while at the same time allowing for protection of a family home or car. Different personal bankruptcy options can provide different protections but all can provide help with overwhelming debt. To begin with, filing for bankruptcy protection creates an automatic stay from the bankruptcy court so creditors must halt debt collection activities during that time.
There are generally two types of personal bankruptcy including Chapter 7 bankruptcy and chapter 13 bankruptcy. Chapter 7 bankruptcy is considered a liquidation bankruptcy in which assets of the filing party are liquidated to repay creditors, however, certain exemptions can provide protection for property such as a home or car. Chapter 13 bankruptcy is a reorganization bankruptcy option that allows the filing party to repay their debts according to a repayment plan worked out with the bankruptcy court. This option can also provide foreclosure protection in some instances.
There are different ways of qualifying for different bankruptcy options and different help may be available in different situation which is why it is important for those struggling with overwhelming debt to be familiar with bankruptcy protection options. These options are available to help them, while protecting a family home or car whenever possible.