Eliminate Many of Your Debts.
This is achieved through obtaining a discharge of debts. The goal of a discharge is to reduce debt and give you a fresh start.
If your home is in foreclosure, a Chapter 13 bankruptcy can stop the proceeding prior to the sale. However, bankruptcy does not eliminate mortgages on your property without payment; rather, bankruptcy will structure a plan repay the amount that you are behind.
Prevent Your Car From Being Repossessed.
Even if the creditor has repossessed your car, filing bankruptcy can effectively force them to return your car or other personal property (if the bankruptcy is filed quickly enough). The past payments you have missed will be consolidated into your Chapter 13 Bankruptcy. After this you will no longer pay the finance company, rather you will make monthly payments to the trustee of your Chapter 13 Bankruptcy who will then pay the finance company.
Reduce High Medical Bills.
Filing a Chapter 7 Bankruptcy can greatly reduce or eliminate medical bills that you have acquired up until the date you file.
Recent Loss of Employment.
Studies show that loss of work is one of the most common reasons people file for bankruptcy. Losing a job is closely tied to high medical bills. Losing a job means this family may be left without the protection of insurance that was once provided by their employer. Often times these two factors combined create an almost impossible mountain to climb without the help of bankruptcy.