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County tax collector files Chapter 13 bankruptcy

A personal bankruptcy filing offers Birmingham residents an option to get debt relief. Both Chapter 7 and Chapter 13 bankruptcy will immediately stop collection efforts and any lawsuits that have been filed against you.

Unlike a Chapter 7 liquidation bankruptcy, Chapter 13 is a reorganization of your financial affairs. It involves a structured repayment plan that allows you to use your income to pay off at least part of your debts over a three to five-year period. In order to qualify for Chapter 13 bankruptcy, your household must have regular income. There are also certain debt limits for secured and unsecured debts.

Chapter 13 bankruptcy is a useful tool for many reasons. This type of bankruptcy will stop foreclosures and repossessions and allow you to keep your secured collateral by paying back the arrearage over the length of the Chapter 13 plan. You may even be able to reduce interest payments on qualifying secured loans.

The story of one Chapter 13 debtor has recently been in the news - not because her case is uncommon, but because of her job title. The debtor is a county tax collector. Her job is to supervise the collection of real estate and personal property taxes. Ironically, the woman and her husband owe $2,253 in back personal property taxes on their two jointly-owned vehicles. The couple also has other financial troubles, which caused them to file for Chapter 13 last year. Their Chapter 13 plan provides for the repayment of the delinquent taxes.

In most bankruptcies, few people know of the filing other than a debtor's creditors. However, the story of this Chapter 13 debtor shows that financial troubles can happen to anyone.

Source: St. Louis Post-Dispatch, "St. Louis county tax collector owes personal property taxes," Paul Hampel, Dec. 13, 2012

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