Manufacturing worker loses financial footing, declares bankruptcy

Sometimes people feel like their financial situation is spiraling out of control and that there will be no end to struggling with debt. This appears to be the case for one manufacturing worker who was the focus of a recent article. His financial fate has remained in limbo for the last three years even though he successfully filed for Chapter 7 bankruptcy. His situation may be far worse, however, had he not filed for Chapter 7 bankruptcy or had he sought alternative debt relief.

Early 2010 marked the beginning of the financial challenges for the 56-year-old manufacturing worker. He fell behind on his house payments after some of his hours were cut at work. Although he was originally earning nearly $70,000 per year, he could no longer manage his house payments after the cut. As a result, he decided to file for Chapter 7 bankruptcy just around the same time that his bank filed a foreclosure complaint.

Although filing for Chapter 7 bankruptcy usually provides individuals with a fresh financial start, the worker's situation took a turn for the worse. Later in 2010 he lost his job. He claimed that his employer illegally discriminated against him and decided to pursue employment litigation. Now, however, his case remains pending before the National Labor Relations Board and he is unsure when he will find relief from all of the struggles caused by his employment situation.

Had the manufacturing worker filed for Chapter 13 bankruptcy instead, he may not have experienced the same extent of relief offered by Chapter 7 bankruptcy. This is because Chapter 13 bankruptcy does not necessarily discharge debts. It simply restructures them to make payments more manageable. Thus, it is more beneficial to someone who has a regular source of income. If the man had filed for Chapter 13 bankruptcy, when he was later fired in 2010 he probably would not have been able to meet these payments.

This story demonstrates that it is useful for individuals contemplating bankruptcy to consider their future and what other challenges may develop. Considering whether a person will have a constant source of income can make all the difference in choosing between Chapter 13 and Chapter 7 bankruptcy.

Source: Huffington Post, "Marcus Hedger, Wrongfully Fired Worker, Loses His Home With NLRB In Limbo," David Jamieson, May 23, 2013

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