Bankruptcy, things you ought to know

Bankruptcy can be a scary word if you let it. My family went through chapter 13 bankruptcy in 2002 – six long years ago. Our story of why we had to choose bankruptcy was rather a common one. We were a 2 income family and the major income earner became permanently disabled with a lifelong illness that only gets worse. Now down to one income in the most expensive place to live in the USA (California) there was not much choice but to declare bankruptcy for ourselves.

Through regular chapter 7 bankruptcy all debts are wiped clean with the exception of secured debts. At the time it would only allow us to own 1 vehicle and it had to be worth under an “X” amount of dollars. We did not owe anything on either of our vehicles but the thought that they had to be sold because they were just over the amount allowed was ridiculous in my mind. Even if we had sold them we would have still needed to replace them since we did not live close to town nor were there any public transportation in our area. We also had a tractor that we used to put in our large market vegetable farm on our 2 acres. The tractor would also have to be sold.

I had the vegetable farm as small part time business at the time to make up for the loss of one income in the family. I told the bankruptcy lawyer about that and that is when he suggested the chapter 13 for business owners. Instead of wiping out all our debt it would be arraigned that we would pay monthly payments on about 20% of the total amount owed. It took 5 years of $300 a month payments to finally pay back our debts and we did not have to lose our cars or the much needed tractor.

Bankruptcy can be tricky so you need to have a very good bankruptcy lawyer to handle your case. Since that time I know that the bankruptcy laws have changed. Since the bankruptcy law is a federal law they should be the same in all states. If you live in the state of New York you should check out this lawyer at New York debt consolidation. I highly suggest you find a local lawyer in your area for a sit down talk about your situation. Bankruptcy may or may not work for you in your case but you should find out all the facts about it first.