Top Twelve Reasons Why People File for Bankruptcy

1. Eliminate the Legal Obligation to Pay Most of Your Debts.

This process of wiping the slate clean is called the discharge of your debts. The goal of a bankruptcy discharge is to wipe out your debts to give you a fresh start. Whether it is through a straight bankruptcy that is called a Chapter 7, or through a reorganization that is called a Chapter 13, most or all of your debts can be wiped out for good.

2. Stop the Foreclosure on Your House and Allow You to Effectively Make Payments to Catch up on Missed Payments of Your Mortgage.

If your home is in a foreclosure, then a Chapter 13  will stop it if is filed before the sheriff’s sale. However, a bankruptcy does not eliminate your mortgages that are filed on your home. Instead, a bankruptcy will structure a repayment plan to enable you to repay your mortgage arrears over a five year period. Your mortgage arrears are the amount that you are behind on your mortgage.

3. Prevent Your Car or Other Property From Being Repossessed.

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