New Hampshire residents may be interested in learning more about the effects that Chapter 7 bankruptcy can have on certain private loans. Some of these loans may be discharged by Chapter 7 bankruptcy in as little as three months, and debtors won't face any tax liability for the discharge. Debtors may be relieved to learn that lenders are no longer able to recover an outstanding balance once the statute of limitations has passed.
Benefits of filing bankruptcy
Many people in New Hampshire are facing the endless problem of mounting debt. As they are forced to take more short-term loans and credit card debts to keep up their day-to-day expenses, their monthly minimum payments continue to grow, and their ability to meet them continues to fall. Even a minor interruption in their financial picture can have drastic consequences.
Qualifications for having tax debt discharged through bankruptcy
Individuals who are overwhelmed by financial obligations may be able to obtain a measure of relief by filing for Chapter 7 bankruptcy and getting some of their debts discharged. In some cases, past due income tax obligations may be discharged through bankruptcy as well. However, there are certain qualifications that they need to meet before this can occur.
Filing Chapter 7 for business owners
Chapter 7 is a personal bankruptcy option that can eliminate some forms of debt and stop collection calls. A small business owner in New Hampshire may be able to file Chapter 7 personal bankruptcy and still keep their business.
Chapter 13 debt reorganization in New Hampshire
For some debtors in New Hampshire who are considering bankruptcy as a possible solution to overcoming unmanageable debt, Chapter 13 debt reorganization may be a viable option. In Chapter 13 bankruptcy, the debtor enters a repayment plan lasting between three and five years, during which time he or she will be required to make all scheduled payments to the estate. At the estate's close, the remaining unsecured debts will then be discharged.
Dealing with unsecured creditors in New Hampshire
When a borrower is unable to make a credit card payment, it is possible that the issuer could seek a wage garnishment or seek a lien on certain property. However, creditors cannot do so on their own. Instead, a creditor must first obtain a judgment and then seek a court order asking permission to garnish wages or place a lien on property. If a garnishment is granted, the law states that a maximum of 25 percent of wages can be garnished each pay period.
Stripping a mortgage lien in a New Hampshire bankruptcy
The bankruptcy court may strip a creditor's lien on a property as part of the bankruptcy process if it is from an unsecured debt. Second mortgages often become unsecured debt as part of Chapter 13 bankruptcy proceedings in cases where the property has very little or no equity. Chapter 7 bankruptcy usually leaves them as secured debt, preventing the debtor from avoiding foreclosure due to a default on a second mortgage.
How to choose between debt relief and bankruptcy
New Hampshire debtors searching for a debt relief plan might want to consider bankruptcy. But before one goes down that route, there are other alternatives to consider. Each choice has pros and cons that should be weighed, and some options are better suited to different situations.
Filing for bankruptcy in New Hampshire
Many New Hampshire residents struggle to cope financially with a household income that barely covers their monthly expenses. An unexpected illness, injury or layoff may quickly lead to bills becoming unmanageable, and many families facing these challenges resort to using their credit cards to make ends meet. If you are in a situation like this, you likely know how difficult it can be to escape a cycle of debt. You may also be familiar with the relentless nature of debt collection agencies.
Is credit counseling required before filing for bankruptcy?
Individuals in New Hampshire who are considering bankruptcy must take a credit counseling course within 180 days prior to filing. The course must be taken through a credit counseling organization that is approved by the Department of Justice's U.S. Trustee Program. During this course, a counselor will go over the debtor's finances, discuss alternatives to bankruptcy and develop a personalized financial plan.
