The Over-50 Resource
Bankruptcy Relief Still Available for Most Individuals

by Greg Stern and Monica O'Brien

Times are tough. Many individuals are using credit cards or high-interest short-term loans (for
example, pay-day and auto title loans) to help make ends meet. This is a recipe for disaster. In
addition, the real estate market is on the verge of crashing, adjustable rate mortgages are making
it difficult for individuals to pay their mortgages, and mortgage lenders are unwilling to qualify
many individuals for new loans.

If you are having problems paying your mortgage or have bills that you just can’t pay, bankruptcy
may offer you a solution. For most individuals, a Chapter 7 wipes out all unsecured debt while
allowing the debtor to keep all of their property. Chapter 13 offers individuals the chance to repay
their debt over a three- to five-year period.

First, you need to ask yourself some important questions:

•        Are you living paycheck to paycheck and still do not have enough money to pay all your bills?

•        Have you been laid off from your job?

•        Do you have medical bills and too little or no health insurance?

•        Are your credit cards out of control and ruining your financial life?

•        Are you unable to pay your mortgage?

•        Is your house in foreclosure? Has a divorce caused you financial distress?

If you answer yes to these, there may be a bankruptcy solution available to you, to help restore
your financial stability and bring your life under control.

The bankruptcy laws changed on Oct. 17, 2005. The new bankruptcy laws are called the Bankruptcy
Abuse Prevention And Consumer Protection Act (BAPCPA) and represent an extensive overhaul of
bankruptcy laws. While BAPCPA is a complex law that imposes significant new burdens and
restrictions on individual consumers filing for bankruptcy relief, most individual consumers who are
overwhelmed with debt will still be able to seek relief under Chapter 7 or Chapter 13. Under
BAPCPA, if a debtor fails to comply with mandatory filing or disclosure requirements, the case will
be subject to dismissal.

The key to navigating this new bankruptcy process is being fully informed and understanding the
new procedures and disclosure requirements. Consumers are wise to seek an experienced and
qualified bankruptcy attorney when considering filing a Chapter 7 bankruptcy or a Chapter 13
repayment plan.

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Greg Stern and Monica O’Brien are attorneys with Gregory K. Stern Law Offices in Chicago. Stern, has been a
member of the bankruptcy panel of the Chicago Bar Association (CBA) Lawyer Referral Service for more than 20
years.
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