With the recent recession that has affected many individuals throughout the U.S., bankruptcy has been a necessary option for many people facing significant financial challenges or unexpected life changes. Personal bankruptcy in the form of Chapter 7 or Chapter 13 can be a remedy to help such individuals or families.
Colorado Republican House candidate Jared Wright has considered withdrawing from this election as news of his personal bankruptcy as arisen. This, along with information that citizens have felt he has kept a secret, has given some the opportunity to speak their mind about his inability to serve in office. In fact, it has driven some Republican voters to consider switching their vote to other candidates. The article is unclear about what chapter his bankruptcy was filed under.
There are two types of bankruptcy typically available to individuals seeking a fresh start: Chapter 7 and Chapter 13. The type and amount of debt owed and current income levels will determine what type of bankruptcy an individual must file. If someone does not qualify for a Chapter 7 bankruptcy because of income, the court can require that person to file under Chapter 13 instead of Chapter 7. Additionally, one cannot discharge child support, alimony or student loan debt through bankruptcy.
Further, one of the primary differences between Chapter 7 and Chapter 13 is the ability to keep one's house and car. With Chapter 7, one's car and house will most likely need to be returned to the creditor if the wholesale value cannot be paid through other means. Under Chapter 13 bankruptcy, a court-ordered payment schedule can allow a filer to keep the vehicle and house if that individual continues to follow that payment plan.
Even though some may not like or agree with a person in political office filing for bankruptcy, it may be a necessary and helpful option in order to allow that person a fresh financial start after unexpected events occur.
Source: KKCO 11 News, "State house balance could come down to D54," Brian Shlonsky, Oct. 18 2012