Many in Summit may question the reason why those who file for personal bankruptcy are said to be seeking bankruptcy “protection.” One may not be able to see exactly what sort of protection bankruptcy provides without having already been harassed by a seemingly endless stream of creditors. Eventually, those creditors lose the willingness to work through debt issues and start targeting the remaining assets that their debtors do have, namely homes and cars.
It’s at that point that debtors need the protection that bankruptcy provides. Not only will a chapter 7 bankruptcy halt any collection efforts that may be underway, but it also provides a way for those debtors to keep their homes and other protected assets provided that they follow the instructions of the bankruptcy court. Often those instructions will include taking steps to ensure that one doesn’t end up in such a precarious financial position again. Those steps may include completing credit counseling and debt management courses.
A good example of just how a Chapter 7 bankruptcy filing can provide one with protection is the recent case of former mayor of New Orleans. The former mayor currently owes more than $500,000 after being convicted on charges of public corruption. Compounding those struggles is the vast amount of consumer debt he and his wife also owe. The couple was facing foreclosure on their home before the wife announced that she had filed a Chapter 7 personal bankruptcy.
Bankruptcy protection is very real to those who face overwhelming debt. Anyone requiring this protection may wish to seek out a bankruptcy lawyer in his or her area to begin the filing process.
Source: WDSU New Orleans “Nagin’s wife files bankruptcy day before home set for foreclosure sale” Gina Swanson, May 07, 2014