When debt load becomes overwhelming, when facing foreclosure, or a mortgage that is upside down, when the IRS or state is knocking at the door for past-due taxes–there are still options, and help is available.

Bankruptcy may be one of your options. Depending on the Chapter you file, 7 or 13, you may be able to stop a foreclosure, stop the repossession of a vehicle, or get a repossessed vehicle back, and eliminate all, or the majority, of your debt. In many cases a skilled attorney can also help you to eliminate tax debt through bankruptcy.

Both Chapter 7 and Chapter 13 put an immediate stop to garnishment and foreclosure. However these chapters each have different advantages. A Chapter 7 rapidly eliminates most debts without the need for repayment, and discharge of debt usually occurs within three to five months of filing. But not everyone will qualify for a Chapter 7. And not everyone will benefit from a Chapter 7. Income is a factor in determining if an individual is eligible to file a Chapter 7, though in some cases, even individuals with a fairly high income can file if certain other requirements are met. Some of the drawbacks of a Chapter 7 are that some assets with high values cannot be protected, and foreclosure is only temporarily stopped.

Chapter 13 works somewhat differently and has certain advantages that a Chapter 7 does not. Like a Chapter 7, Chapter 13 also stops most garnishment. High income individuals who do not qualify for a Chapter 7 can often qualify to file a Chapter 13. Assets that would be lost in a Chapter 7 can be kept in a Chapter 13. Chapter 13 also gives the filer an opportunity to catch up on missed car payments or get a repossessed vehicle returned. And it eliminates penalties imposed on tax debt that is otherwise not dischargeable. This can sometimes cut a tax bill substantially.

Chapter 13 also offers opportunity to not only stop foreclosure on a temporary basis, but to work out a permanent solution and allow the homeowner to keep his or her property. To millions of homeowners this is one of the most beneficial advantages of filing a Chapter 13 bankruptcy, even when they have no other debt to discharge. This is done through the Chapter 13 Plan.

The Plan is a repayment program that takes place over a period of three to five years and is based on a complex series of calculations that include income, assets, allowable expenses, type of debt: secured, unsecured, or priority debt, as well as some additional points. Depending on various factors you may pay only a small portion of what you owe to your creditors; or you may pay substantially more if your income allows. The great benefit of a Chapter 13 is that in the hands of a skilled attorney it can be creatively used to solve a variety of problems.

The good news is the majority of debts can be discharged in bankruptcy. However, sometimes bankruptcy is not the best option. In such a case, debt settlement can sometimes be the best alternative to eliminate debt. Debts can usually be settled for substantially less than the full amount owed, often for much less, and settlement stops any further collection activity, providing that the settlement is done correctly.