THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, October 30, 1995 TAG: 9510280226
SECTION: BUSINESS WEEKLY PAGE: 14 EDITION: FINAL
TYPE: Cover Story
SOURCE: BUSINESS WEEKLY
LENGTH: Short : 44 lines
Someone seeking advice from the Consumer Credit Counseling Service of Virginia Inc.'s office in Chesapeake won't hear any reference to personal bankruptcy.
``I might advise that someone take a part-time job but never bankruptcy,'' says Sharon P. Neuhaus, manager of the office.
In some instances, individuals have to deal with debts that cannot be eliminated by filing for bankruptcy. These include obligations from student loans, child support and alimony, and taxes.
But bankruptcy should be considered when a person's debts far exceed what they can afford to pay creditors, says David Rubinstein, executive director of the Virginia Poverty Law Center in Richmond.
Often, whether to use a bankruptcy filing involves more than financial considerations. ``A person may feel the need to get the situation behind them for emotional reasons,'' Rubinstein says. ``That's especially the case for an elderly person who cannot handle the stress from dunning phone calls.''
Before resorting to bankruptcy court, an individual should find out which of their assets or sources of income could be attached by creditors if they did not file for bankruptcy.
``If the answer is `Nothing,' they should reconsider,'' Rubinstein says.
Most personal bankruptcies are Chapter 7, or ``straight'' bankruptcies. This type wipes out most debts and allows an individual to keep certain essentials, including basic clothing, ordinary household furnishings, personal effects, Social Security payments and public assistance.
A more limited form of bankruptcy is a Chapter 13 filing. This version enables an individual to restructure his debts under court protection and to repay at least part of what he owes. MEMO: [For a related article, see page 12 and 15 of this date.]
KEYWORDS: PERSONAL FINANCE BANKRUPTCY by CNB