Protecting Your Rights And Your Future

Bankruptcy is a “fresh start” remedy provided by the federal govt

| Aug 7, 2015 | Personal Bankruptcy

Hard-working people may suffer a medical or financial emergency that is entirely out of their control and not their fault. Illnesses, disability, being laid off at work, accidents and other disasters usually hit without warning and create a substantial and lasting deficit in a family’s monthly budget. The federal government provides consumer bankruptcy relief for just those situations, with the purpose of giving an individual or married couple residing in Arkansas or elsewhere a chance to start fresh and get back to normal.

The quickest path to a fresh start is Chapter 7. A qualified individual or married couple may obtain instant relief from their unsecured creditors and keep their homes and cars in most instances. They generally will also be able to retain most of their other assets under the available exemptions. Generally, the federal exemptions are sufficient to cover most ordinary possessions of the average consumer filer.

In order to understand accurately the asset exemptions and what options one has with respect to secured accounts, the prospective filer will benefit from a consultation with an experienced consumer bankruptcy attorney. In that consultation, the best strategy for debt relief and asset preservation will be recommended going forward. If the individual or couple wish to retain a home that is up-to-date in its mortgage payments, for example, they will in most cases simply reaffirm the account and keep the monthly payments current during and after the bankruptcy.

When the mortgage is in arrears and the owners want to keep the home, counsel may recommend the filing of a Chapter 13 bankruptcy. This is a three to five-year payment plan in which the mortgage arrears and other arrears on secured accounts may be paid monthly and brought current. At the successful conclusion of the case, the mortgage will be totally current. In a Chapter 13 filed in Arkansas or any other bankruptcy district, it is usually also feasible to discharge forever all unsecured credit card and medical debt by making small or nominal payments in the monthly payment plan.

Source:, “When should you consider bankruptcy?“, Matt Mikus, July 24, 2015