Filing for bankruptcy can be a scary thought for some people. However, the truth is that in many situations, seeking the sanctuary provided by the bankruptcy process is the best thing to do. For a current example, look at Ayanna Kilpatrick, sister of former Detroit Mayor Kwame Kilpatrick.
With debts exceeding $345,000 (including $54,000 in back taxes), Ayanna Kilpatrick is getting the relief she needs by filing for Chapter 7 bankruptcy. Chapter 7 bankruptcy will allow Ayanna Kilpatrick to liquidate her assets, which are few, and eliminate her debts.
This type of bankruptcy is quite different from Chapter 13. Chapter 13 is a form of debt restructuring. However, because Ayanna Kilpatrick doesn’t have any considerable assets, Chapter 7 makes the most sense for her situation. She lists only $877 in personal property and her home in Detroit as assets.
However, because the housing market has suffered greatly in Detroit, her home is hardly any asset at all. The value of the property has plummeted form $250,000 to an estimated $70,000. Ayanna Kilpatrick has had trouble facing foreclosure on her home in the past.
For someone who has fallen into such dire financial circumstances, filing for bankruptcy is a wonderful option to have. The bankruptcy process will allow Ayanna Kilpatrick to restart her financial life. With the burdens of an unrealistic mortgage, credit card debt, back taxes, and a failing consulting business, Chapter 7 will be quite a relief.