Government Debt Assistance
If you're struggling to make ends meet, you've probably wondered whether there's any sort of government debt assistance program that might be able to help you ease your financial burden. The good news is that personal bankruptcy protection may be an option.
Bankruptcy may not be right for everyone, but it has helped millions of Americans each year silence creditors and get a fresh financial start.
To learn if bankruptcy may be right for you, connect with an attorney in your area for a free, no-obligation consultation. Simply fill out the case review form below to get started.
Bankruptcy's Debt Relief
So why does the federal government offer debt assistance in the form of bankruptcy protection? There are many reasons, including:
- Encouraging entrepreneurs: Innovating in business or private ventures is generally a risky maneuver, but striking a new course is part of the classic American spirit. In order to create a financial climate that was friendly to innovation, the federal government outlined the rules of bankruptcy protection, which allows individuals and companies to get on top of their debts, should those debts become too crushing to handle. With the safety net of bankruptcy in place, the theory is that people will take risks (that will benefit the country as a whole) that they might not have taken otherwise.
- Supporting citizens: Just as programs like Medicaid, Medicare and Social Security are designed to help Americans who have limited incomes for one reason or another, bankruptcy is designed to help those whose debt has gotten beyond their ability to pay. Thanks to the financial management and credit counseling components required of all personal bankruptcy filers, most people who seek bankruptcy protection should emerge with financial management skills they may not have had before they filed.
Do You Qualify for the Debt Relief Bankruptcy Offers?
So how can you determine whether you might qualify for bankruptcy protection? It depends whether you want to file under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code.
- Chapter 7 bankruptcy: In order to qualify for this type of bankruptcy, which is sometimes called "liquidation," you must first pass the Chapter 7 means test, which compares your household income with that of other families of the same size in your state. If you make less than the median income, or if your disposable income and unsecured debts meet certain requirements, you probably qualify for Chapter 7 protection. This type of bankruptcy offers filers a full discharge of some or all of their unsecured debts, and tends to move quickly (cases generally last between four and six months).
- Chapter 13 bankruptcy: While there's no test to pass to qualify for Chapter 13, filers must have a steady source of income in order to file. Chapter 13 bankruptcy requires filers to make regular payments to a three- to five-year repayment plan to catch up on past-due debts. Missing a payment means losing the protection of the bankruptcy court.
Could Bankruptcy Help You?
Bankruptcy may stop wage garnishment, foreclosure, repossession, contact from debt collectors and more. If you’re ready to figure out whether bankruptcy protection might help you and your family, connect with a bankruptcy lawyer today.