There are many good reasons for an individual or married couple residing in Arkansas to file a personal bankruptcy. According to bankruptcy attorneys, most people who file owe substantial amounts in medical bills that they will never be able to pay. Another major reason is where an individual is laid off and the family budget is put into a crisis mode. Sometimes, people will turn to credit cards to get through what they optimistically hope will be a temporary money crunch.
In the latter situation, even where the unemployed person becomes employed, the accumulation of massive personal loans and credit card debt will be virtually impossible to handle and get back on one's financial feet at the same time. Chapter 7 is a popular device that will wipe out all unsecured medical and credit card debt, while allowing an individual or married couple to retain their basic belongings and furnishings. At the same time, one's post-bankruptcy income is fully available to the family to help it get back on its feet.
In most Chapter 7 bankruptcies, there are sufficient exemptions to keep one or more used motor vehicles. If a vehicle is subject to an up-to-date car loan, the owner can reaffirm the car loan and keep making the payments. This is a major way for people to keep a late model vehicle during and after the bankruptcy. However, people sometimes want to return vehicles that they cannot afford or where the value of the vehicle is much less than the balance due on the car loan.
In the latter instance, the car is returned during the bankruptcy and the balance of the loan is fully discharged and eliminated. Furthermore, where there has already been one or more repossessions at the time of filing, the bankruptcy will wipe out the large deficiency balances often claimed due by the bank. In the final analysis, Arkansas residents confronting unmanageable debt may find that a consultation with an experienced bankruptcy attorney may turn out to be the first big step in building a successful financial future.
Source: uppermichiganssource.com, "The process of bankruptcy", Aaron Boehm, June 6, 2015