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Chapter 7 bankruptcy gives mother new outlook on life

Even for individuals who have surpassed living paycheck to paycheck, a single tragedy or financial disaster can be enough to plunge them into unthinkable debt. Medical bills are a prime example for people in Washington, as even those who have health care insurance often face costly co-pays for necessary surgeries and procedures. After taking on thousands in debt following a medical emergency, one mother filed for Chapter 7 bankruptcy and found a bright new future down the road.

It is exceedingly difficult -- if not downright impossible -- to graduate from college without some type of debt. Before having her appendix removed through an emergency surgery and racking up debt after a serious car wreck, the out-of-state mother already had $12,000 worth of student loans. Adding in the medical bills from her appendectomy and the credit card debt from repairing her vehicle, she was approximately $20,000 in debt with no way out.

Before filing for bankruptcy, creditors were calling her with intimidating threats for failure to pay. When she finally did file, she experienced more than just financial relief; she also gained reprieve from the harassing phone calls. Her credit score also began to improve. Although her student loans were not eligible for discharge, relief from the other debts made it possible for her family to focus on repaying both her and her husband's student loans.

Since filing, she and her husband have paid roughly $15,000 toward their remaining debt, which includes consumer debt that her husband accumulated before their marriage. With a better future on the horizon and more manageable payments, the couple should be out of debt by 2019. Far from being an admittance of failure as some debtors in Washington may view it, filing for Chapter 7 bankruptcy enabled her to discharge overwhelming debts in order to regain control of her own finances.

Source: Business Insider, "What one woman learned from declaring bankruptcy after taking on $20,000 of debt", Libby Kane, July 21, 2015

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