A Case Study – Chapter 13 Bankruptcy

If you have way too much credit card debt and feel as though bankruptcy is your only option, think again. Credit debt bankruptcy should always be your last option. There are better debt relief options out there and here we will take a look at the top 3 for consumers and small businesses.

In one Chapter 13 plan our law firm set up a plan to pay off the clients entire debt to the IRS without interest. Bring her mortgage payments current and stop foreclosure. Chapter 13 also allowed our client to pay off 96,000 in credit cards with no interest for a little over $10,000.

So, I’ll take the liberty and share with you some of the common factors that I’ve seen among bankruptcy clients:

Our office designed a Chapter 13 plan to allow the client to address all of her financial problems. First, we designed the plan to pay off the unpaid taxes in full (required by law). However, by including the taxes in the Chapter 13 plan the client was able to pay off the taxes over a five-year period. Even better the Chapter 13 prohibited the IRS from charging interest on the unpaid taxes saving the client $540.00 per month in interest. The filing of the Chapter 13 plan also stopped the IRS levy on our client’s weekly paycheck.

They don’t stand out from the crowd, they’re just like you and me: Many people assume that those who file for bankruptcy stand out from the crowd as being destitute – with ripped, worn out clothing, just 2 steps removed from the beggars you might find in a dark alley. Excuse me, but doesn’t that directly conflict with the image of carefree spenders, who went on shopping sprees before running to the courthouse to file for bankruptcy? Yes, the two opposite images cannot co-exist, yet one might assume that the typical bankruptcy client falls into one of these two categories. News flash: the typical bankruptcy client sits in temple/church right next to you. They live in homes that are worth anywhere from $250,000 – $2 million dollars (or more!). They don’t dress flashy, but they dress appropriately. They are professionals from every sector of every industry. While some of them might be unemployed, many have full time jobs. Their children play with your children. The cars in their driveway are not necessarily the newest, but they are not driving cars from 1985, either. You don’t realize it, but they’ve been struggling financially, in private, while trying to get by and keep a proud face and avoid standing out from the crowd.

Third, our office designed a Chapter 13 plan that let her address the $96,000 in credit card debt. We crafted a plan that allowed our client to payoff the credit card debt with no further interest payments or late fees. This saved the client about $1,400 per month in interest and fees. We were further able to structure the Chapter 13 plan allowing the client to payoff the entire $96,000 credit card balances with payment totaling only $10,600.

Most consumers that qualify are able to eliminate 40-60% of their unsecured debt balances while avoiding many of the negative consequences of filing credit debt bankruptcy.

The typical bankruptcy client is one who has already decided to control their own destiny and become fully accountable for their financial future, while leveraging those strict laws available to them through the bankruptcy code.

Hi readers my name is Harris Smith, thanks for reading this article I hope I will be useful to find home equity line of credit

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