Curious about Bankruptcy

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      My parents just finalized Bankruptcy this month. They filed chapter 7.
      My mother was so upset by all of the stress of filing that she got very
      sick for a while, but she is improving now that most of it is over. My
      parents are in their 70’s and were living on my father’s pensions and
      social security.

      They both have medical problems and they had been
      charging drug prescriptions and medical bills for quite some time. It
      finally caught up with them and my Dad was paying the minimum payment on
      his credit cards by getting cash advances from another one. They were
      $45,000 in debt.

      When my Dad showed me how much their payments were and
      what he made, I couldn’t believe they had been making it for as long as
      they had.

      They went to a credit counselor and they told them that they were too
      old to set up a pay back plan, and were advised to file bankruptcy. I
      loaned them the $800.00 it cost in fees to file. $800.00 is a reduced
      fee because of their age.

      It can cost several hundred more than that for
      the fees, including attorney fees.

      They rent an apartment so they were safe to file chapter 7. If you own
      a home you can be forced to sell it with chapter 7. Chapter 11 protects
      your primary residence, but doesn’t “wipe the slate clean” like chapter
      7 does.

      They had to get together every document that relates to their finances
      including taxes, all bills, insurance, pensions etc. They were allowed
      to keep their car if it wasn’t worth over a certain amount. They could
      keep one account open if they wanted too.

      You are only allowed a certain
      amount of things. You can only have so much money in tools, household
      goods, jewelry, savings etc. If you had charged something to your cards
      in the last 3 months it can be repossessed.

      One thing to remember that
      surprised them, is that if you are a co-signer on a loan for someone and
      you file bankruptcy, you can ruin the credit of the person you co-signed
      for as well as your own. My sister found that out the hard way because
      my Dad had co-signed on her car.

      The companies that they owed money to drove them crazy with phone calls.
      My Dad finally started telling them that he had filed bankruptcy and
      most of the companies were very understanding. My Mom and Dad had
      always had great credit and paid all their bills.

      After your attorney files the papers for you, you have to wait on a
      court date. It takes several months to get everything finalized. When
      you go to court you can potentially have to face all of your creditors
      in court.

      They have the right to fight the bankruptcy and they can
      demand that your house be searched for any sellable goods. Mom and Dad
      were lucky and none of their creditors showed up. The attorney told
      them that he didn’t think any of them would show up because Mom and Dad
      didn’t have enough money to fight for.

      It was a terribly traumatic thing for them to go through. It was very
      embarrassing for them. It isn’t a fun thing to do, but in some cases it
      just isn’t avoidable.

      Something has to be done in this country about the soaring costs of
      prescriptions and health care! The instances of bankruptcy being filed
      by seniors is skyrocketing and health debt is the main reason for it.

      Sorry this was so long, but I thought since I had just gone through this
      with my parents I could shed some light on it.

      Nancy Ann

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