The economy is struggling in 2011. Millions are unemployed, underwater on their homes and deep in debt. Although bankruptcy and food stamps are solutions of last resort, having debt problems resolved and food in the fridge will take a great deal off your mind. Filing for bankruptcy will also stop bill-collection efforts, including foreclosure.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows a debtor to keep his property and repay some or all of his delinquent loans back over a three- to five-year period. It's commonly referred to as a "reorganization" bankruptcy, and only those who can afford a repayment plan will be permitted to file Chapter 13. As of 2011, secured debts, which are loans tied to assets like a house or car, cannot exceed $1,010,650; unsecured debts can't exceed $336,900. Priority debts, such as child support, alimony, employee wages and some taxes, must be paid in full, as do secured debt payments. Other debts, like credit card debts, may be partially paid or eliminated entirely.
Chapter 7 Bankruptcy
Chapter 7, also known as a "straight" or "liquidation" bankruptcy, eliminates most, if not all, of the consumer's debts. However, the consumer is usually required to sell assets -- such as a house or car -- to repay creditors. The catch is that you must pass a means test; if you earn too much, you may be required to file Chapter 13. In addition, you must not have filed bankruptcy in the past six or eight years, depending on the type of bankruptcy filed.
The Supplemental Nutrition Assistance Program, also known as SNAP or food stamps, helps the economically disadvantaged purchase food. Whether or not you qualify depends on your income, how much money you have saved and how many people live in the household. Food stamps must be used to purchase unprepared food; items such as alcohol, pet food or preheated food can't be purchased. (An exception to the preheated food rule exists if the recipient is elderly, disabled or homeless.) Toiletries may also not be purchased using food stamps.
If you find you're desperate for additional help, don't despair. There are several local government and private agencies that work hard to get those down on their luck back up on their feet. For example, the Women, Infants, and Children Supplemental Nutrition Program (WIC) is designed to help pregnant women as well as mothers with infants and small children get "free, healthy foods," according to WIC. The elderly can reach out to Meals on Wheels. Moreover, local churches and synagogues frequently provide food pantries or other community outreach programs that are designed to give a helping hand to those who need it most.
Lisa Bigelow is an independent writer with prior professional experience in the finance and fitness industries. She also writes a well-regarded political commentary column published in Fairfield, New Haven and Westchester counties in the New York City metro area.