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Councilman files for Chapter 13 to save home

Many Colorado residents have preconceived notions when they hear certain words, whether they realize it or not. For example, when individuals hear the word bankruptcy, they may conjure up thoughts of less fortunate individuals who have no money or assets.

Yet, bankruptcy is a process that appeals to many, no matter how many assets they have. In addition, many individuals do not realize how quickly they may be confronted with the decision of whether to file for bankruptcy when certain events happen.

For instance, a city councilman recently found it necessary to file for Chapter 13 bankruptcy in order to stop foreclosure on his home. By filing for Chapter 13, the man will enter into a plan that will allow him to make manageable payments on his restructured debt over the next five years. The man's Chapter 13 petition declared about $224,000 in liabilities, combined with assets of $162,000.

Last year, more than 366,000 individuals found themselves in the same position as the councilman and filed for Chapter 13 bankruptcy. Many were likely in the same position in terms of needing to save their home from foreclosure, which they may do under Chapter 13.

Individuals may have also found it attractive that they could reschedule their secured debts and extend the repayment period over the life of the plan set up under Chapter 13. This has the effect of lowering the payments, which is a must for many individuals who need debt relief.

Ultimately, the councilman felt that going through Chapter 13 would make him a better councilman. He expressed sympathy for others who had to go through bankruptcy, whether it be because of job loss, medical reasons or otherwise. At the end of the day, he, along with the thousands of others who go through Chapter 13, will be able to clear their debt while keeping their home, and move on with their lives.

Source: Baltimore Sun, "Councilman Curran files for personal bankruptcy," Yvonne Wagner, Aug. 1, 2013