Tom (who has a wife and three children) owes 75,000 in credit card bills none of
ID: 2427233 • Letter: T
Question
Tom (who has a wife and three children) owes 75,000 in credit card bills none of which is secured. Tom makes 40,000 a year in a state that has a median income of 60,000 per year for a family of five. Tom does not own a car and does not have any valuable property. Tom hopes to get a fresh start. 1 What bankruptcy chapter should tom use? What happens if he files under that chapter his petition is granted by the bank ruptcy court?
scenario 2 Mary jones a single woman owes 75,000 in credit card debt. Mary makes 125,000 a year in a state that has a median income for a single person is 50,000 a year. Mary owns acar she wants to keep as well as 25,000 in jewelery she wants to keep. What bankruptcy chapter will mary likely be required to use? What happens if she files under that chapter and her petition is granted by bankruptcy court?
scenario 3 Cain and abel own CA carpet installation. Buisness has been bad and the CA Carpet Instilation can not pay their employees this month. CA carpet installation has 50,000 in carpeting and other materials that is uses in its carpet installation buisness. CA carpet installation has a lease on a building in bigtown as well as a lease on two delivery vans. At the time CA carpet decides to declare bankruptcy. Carpet supp;y has filed a lawsuit for a 25,000 unpaid bill. In the lawsuit Carpet Supply seeks to repossess half of CA carpet instalations stock of carpet rolls.
Should CA carpet installation file for bankruptcy? For what bankruptcy chapter should CA Carpet installation file? What happens to carpet supplys lawsuit when CA carpet iinstallation files bankruptcy petition? Will Ca carper installation be able to continue to operate while its bankruptcy case is proceeding? What happens if CA carpet installation decides it does not need one of the delivery vans?What happens to CA carpets 25,000 debt if its recgonizzation plan is accepted byy the bankruptcy court?
Explanation / Answer
SCENARIOS
Filing for bankruptcy is not a decision that should be taken lightly. If you are struggling with credit card debt, whether it is in your best interest to stop making payments and file for bankruptcy depends on:
When contemplating bankruptcy, the first thing to consider is whether you can afford to pay off your credit cards. If you make enough money to pay back your credit cards, you may not qualify for Chapter 7 bankruptcy. If you have a lot of disposable income, you may be forced to pay back a significant portion of your credit card debt through a Chapter 13 repayment plan.
In some cases, you may be able to negotiate with the credit card company and settle your debt for less than the full balance you owe. Alternatively, you may be able to lower your interest rate and combine your credit cards into a single loan through debt consolidation. However, if you are struggling financially and can’t afford to pay back your credit cards, bankruptcy may be the right choice for you.
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