So, last we spoke, we spoke about Mary’s account being frozen. The creditor had frozen Mary’s 12k 401k loan proceeds and Mary had come in to see me about what her choices were to resolve her debt problem.
She could do nothing, and lose the money, and have her credit remain crappy. She could do debt consolidation and hope her creditors bought into it without continuing to freeze her accounts and garnish her wages when she returned to work. She couldn’t file a Chapter 7 Bankruptcy because her wages were too high. However, since she had no income for a few months, her income put her below the median income which meant we could put her in a 3 year Chapter 13 Bankruptcy plan.
In a Chapter 13 Bankruptcy, Mary could make her creditors remain at bay (they could not garnish her wages or levy her bank account while in the plan). Mary could make a payment she could afford to pay, and at the end of a 3 year plan, whatever debt that remained unpaid, would be wiped out, tax free.
Sounds like a good deal right? Well, it is. Mary made payments of $300.00 per month for a total of $10,800.00. The remaining unpaid debt, nearly $27,200.00 was wiped out, tax free. Mary couldn’t help it she had medical problems- could she? Of course not. And yet, life had dealt Mary this hand. Like at the hospital, Mary needed to find the medication to solve her debt illness. And she found the medication in the form of a Chapter 13 Bankruptcy.
I hope you enjoyed the story of Mary and her husband. They solved a debt problem for good and got their lives back. When the time is right, or when you are ready, reach out to Minnesota’s oldest bankruptcy law firm, since 1972, at www.kainscott.com. You will be glad you did!