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Simon, Fitzgerald, Cooke, Reed and Welch
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Shreveport Bankruptcy Law Blog

In some situations, bankruptcy can help you avoid foreclosure

Concerns about the family home are common in people considering bankruptcy. When you find yourself in over your head financially, you may end up making a few late payments or finding yourself unable to pay your mortgage some months. All it takes is a missed payment that you can't catch up on in a month to put you at risk of losing all of the equity you've built up in your home.

Thankfully, if you're facing potential foreclosure, filing for bankruptcy protections can put a temporary hold on those proceedings. You need to look carefully at your income and financial situation to determine if filing for bankruptcy protections will leave you able to continue paying your mortgage.

Make sure you qualify before filing Chapter 13 bankruptcy

When financial crisis hits, it's easy to feel overwhelmed and worried about your future. Especially if creditors are calling you every day and lenders in Louisiana are threatening to call in their loans, you may be facing the very real possibility of losing a vehicle or even your home. Chapter 13 bankruptcy is often a viable solution to serious financial problems.

If you think you may want to file a petition for Chapter 13, you'll want to do some research ahead of time to make sure it's the type of debt relief that best fits your particular needs at this time. You must satisfy eligibility requirements before processing an application. A less stressful means of research, rather than trying to do it all on your own, is to ask an experienced bankruptcy attorney to review your case.

Deal falls through, company files Chapter 7 bankruptcy

Louisiana companies often use mergers or acquisitions to rebound from serious financial problems -- blending the companies' multiplies resources, which, in turn, can often help get things back on track. It doesn't always work out that way, however, as made evident by a recent situation involving Rosetta Genomics and another company. After a planned merger deal fell through, Rosetta filed for Chapter 7 bankruptcy.  

The merger was planned to occur with Genoptix. The two companies had proposed an earlier merger that never got off the ground due to lack of shareholder support. However, a more recent proposal for $9 million garnered the approval needed to move forward. It first seemed as though everything was going according to plan.

Forced Chapter 7 bankruptcy may impact more than one business

Most Louisiana business owners understand that any number of issues can financially make or break a company. Many business owners try to expand their earning potentials and boost their overall productivity and profitability through mergers or acquisitions. Doing so often helps struggling businesses stay afloat -- often, but not always. Others wind up filing Chapter 7 bankruptcy to obtain debt relief and start afresh.                 

A business in another state purchased another company through a bankruptcy auction. The deal was led by a millionaire who placed up the assets of the acquiring company as collateral to purchase the other. The plan has apparently not worked out so well because several other businesses have joined efforts to petition a forced Chapter 7 bankruptcy against the company that made the acquisition.  

Debt relief may be major concern for Louisiana cancer patients

A woman in another state recently shared her thoughts regarding a problem she believes many chronically ill people face. She herself understands what it's like to need debt relief when a financial crisis arises due to exorbitant medical expenses and other related matters. The woman said that at the time, her main concern was surviving her disease so her children would not be left without a mother. Many Louisiana readers can surely relate.

As a breast cancer patient, the woman quickly learned how expensive chemotherapy, radiation and other treatments are. Her medical care prompted a major financial crisis. To make matters worse, while she faced approximately $50,000 in medical costs, she lost her job and insurance coverage. Increased treatment prices combined with rising deductible costs for patients are two key factors resulting in serious financial problems for many long-term care patients in Louisiana and elsewhere.  

Bus company files Chapter 7 when liabilities outweigh assets

In Louisiana and other states bankruptcy is a responsible option to achieve debt relief. Every situation is unique and circumstances must be carefully reviewed before a decision can be made regarding whether Chapter 7 or Chapter 13 is the best choice. Each includes various eligibility requirements that must be fulfilled in order to qualify.  

Chapter 7 typically includes liquidation of assets. Chapter 13 is more of a reorganization plan, where the person filing may retain ownership of assets and obtain an alternate payment plan that must be approved by the court. Businesses may also file for Chapter 7 bankruptcy, though they typically use Chapter 11 for debt reorganization.  Most business owners consult with attorneys before choosing their courses of action, which is what one company facing financial difficulty in another state did.

The connection between unemployment and high credit card debt

In Louisiana and throughout the nation, many households contain one or more adults who are out of a job. Some were unexpectedly let go when their employers determined a need to cut costs; others lost their positions when the companies they worked for restructured and consolidated departments. While employment analysts say the future looks bright for America, the current rate of unemployment continues to take its toll, which, unfortunately, often leads to high credit card debt for many out-of-work consumers.  

It's not only unemployed people who rack up credit card debt. Many dual income families suffer serious financial crises when unforeseen issues arise that cost them more funds than they have on hand, such as medical emergencies or other urgent matters. Most people intend to use their credit cards as temporary means to meet expenses, but they often run into trouble when trying to pay off their balances every month.  

Things to know about Chapter 7 debt reaffirmation

Many people throughout the nation, no doubt including some in Louisiana, have fallen upon hard times financially. Some will likely be able to resolve their financial problems by adjusting their spending habits. Others, however, face debt situations that have gotten out of control, and they have no feasible means for eradicating their problems. Chapter 7 bankruptcy is often the most viable solution, and in cases where the person who owes money is looking for ways to retain a secured asset, such as an automobile, a reaffirmation agreement may be possible. 

When someone reaffirms a debt, it not only means he or she gets to keep the asset in question, it also means the person is agreeing to retain the liability as well. Therefore, the debt will still be owed and payments still need to be made until the debt is satisfied. Debt reaffirmation must take place before the debt in question is discharged through Chapter 7 bankruptcy.  

Type of debt relief chosen impacts future credit report

One of the issues many people in Louisiana worry about when they face serious financial crises is how their options to resolve their money problems may affect their future. For instance, many people are concerned that once bankruptcy is listed on their credit reports, it will never go away. While it's true that bankruptcy definitely impacts a credit score, the consequences of filing for this form of debt relief are usually temporary.

How long bankruptcy remains on a credit report depends on the type of bankruptcy option chosen. Most individuals typically file either Chapter 7 or Chapter 13. The eligibility requirements for each type vary, and being eligible for one does not necessarily mean a person is also eligible for the other. Chapter 13 generally stays on a credit report for seven years.  

Debt stresses you out

People often live with debt, trying to scrape by in any way they can. They think paying off those credit card bills is the most important thing in the world.

It leads to a potentially difficult cycle. You work 12 hours a day, in two jobs. You never buy things that you want. You never go on trips. You put aside every cent that you can, and you buy the bargain version of everything.

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