Some people do not qualify to file Chapter 7 bankruptcy but qualify for Chapter 13 instead. Chapter 13 is the type of bankruptcy that involves debt consolidation. It is reserved for people who have enough disposable future income to pay some of their debts back. In the case of Chapter 13 bankruptcy, your “disposable income” will be paid in one lump sum to cover your debts over the next three to five years. After that period of time, no matter how much of your debts you’ve actually paid, your debts are wiped clean.
Our attorneys and the team at Skrupa Law Office are extremely effective at getting all sorts of daily expenses classified as “non-disposable” income, meaning you won’t have to give them up as part of a bankruptcy agreement. Sometimes people who owe $50,000 in house payments and face foreclosure only end up paying $7000 over three years, at which point they get a fresh new start. Sometimes people who have debt defaults on car payments only have to pay blue book value of their car, not what they actually owe.
The important thing to remember is that filing for bankruptcy immediately stops all creditor harassment, creditor phone calls, lawsuits and wage garnishments. Very few people have to give up their possessions as a result of bankruptcy. Bankruptcy can STOP repossessions from happening!