Often, when a person is considering filing Bankruptcy, it is because a creditor has (or is about to) sue. While many creditors, such as banks that are owed credit card debt, will wait until a substantial bill has developed, some … Read More »
There are two main kinds of consumer bankruptcy: Chapter 7 and chapter 13. Each will help in a financial crisis, and each has a different way of solving money problems.
Chapter 7 bankruptcy, or liquidation, is the most common. A Chapter 7 bankruptcy won’t get rid of all debts but is very good at eliminating unsecured debts such as credit cards, medical bills, old utility bills, signature loans, etc. Chapter 7 cases proceed fairly quickly, generally completing in just a few months. If you choose chapter 7, you will completea fairly lengthy bankruptcy petition. Many of the questions are asked more than once, in different sections, in different ways. But, generally, the petition requires that you list all of your assets and all of your debts, disclose your income and expenses and significant legal and financial events such as recent windfalls and losses, transfers of assets, marriages and past addresses.
On March 26, 2010, the Administration announced enhancements to the Making Home Affordable Program (MHA) and the Federal Housing Administration (FHA) refinance program to give a greater number of responsible borrowers an opportunity to remain in their homes and reduce costly foreclosures. The changes are two-fold: Provide temporary assistance to unemployed homeowners while they search for re-employment; and give lenders greater flexibility to reduce mortgage balances.
And Bank of America announced a program, initially aimed at up to 45,000 Countrywide borrowers, that will reduce principal balances up to 30% of the loan amount, to help keep people in their homes and avoid foreclosure.