Some debtors in Connecticut may decide to file for bankruptcy after facing collection calls, lawsuit threats and other actions taken by creditors to. When a bankruptcy petition is issued, an automatic stay that halts all efforts to collect existing debts is initiated. Creditors that want to pursue a lawsuit, repossess a car or other property, or set off debts need to go to the court for permission. In general, the bankruptcy court becomes the venue to address debts, and filers may find relief from the constant onslaught of creditor actions.
Individuals who are unable to meet their debt obligations may be able to have their debts discharged through a liquidation bankruptcy. As the process implies, assets might be liquidated in an effort to raise money to pay off outstanding loan balances. Those who file for Chapter 7 protection may need to pass the means test as a requirement of obtaining such protection. This checks to see if a debtor's income is lower than the median in his or her state.
Some people in Connecticut may be struggling with substantial student loan debt. The total student loan debt nationwide is $1.59 trillion. Unfortunately, student loan debt is rarely dischargeable in bankruptcy.
People in Connecticut who are struggling with medical debt are not alone. They are among around 137 million people throughout the country who are in the same situation. Many of them are like one 59-year-old woman who lost her job in 2013 and could not keep up with her COBRA payments.
New Jersey consumers who are in debt have several options to reduce or eliminate it. There are many factors that may influence which tools they use to reduce the amount that they owe to creditors. For instance, those who make $100,000 a year may be able to commit to paying creditors in full without the need for a debt settlement or bankruptcy. Those who have a limited income may want to pursue a Chapter 7 bankruptcy.