People in New Jersey may be familiar with the man who developed bronchiolitis obliterans, or “popcorn lung,” after working in a popcorn plant. He developed the disease after breathing in toxic chemicals that are found in artificial butter flavoring on microwave popcorn. Eight years ago, he was awarded $18 million for the damage to his lungs.

Much of that money is gone now and the couple filed for Chapter 7 bankruptcy protection. Due to a number of issues, the man and his wife, who was also awarded $2 million, have lost much of this settlement money. The man’s health is continuing to decline, so the couple took steps to get a fresh financial start by filing for bankruptcy.

For those dealing with mounting medical bills, harassing creditors and ongoing interest penalties, Chapter 7 bankruptcy may be a very beneficial option. By filing for Chapter 7 specifically, a person can receive relief by having unsecured debt discharged. It will also stop the harassment from creditors and the process of a foreclosure or repossession.

In this case, the couple didn’t just collect $20 million in cash. At least 35 percent of the award, or $7 million, went to the man’s lawyer, and an unspecified amount was given to other affected workers. He also has to worry about his substantial medical bills, which include a possible double-lung transplant.

The couple was building a home when they fell behind on payments to the builder. A home they thought would cost just about $400,000 escalated into a nearly $4 million project. A judge ruled that because they were behind on about $107,147 in payments, the couple would not only have to catch up, but they would also be responsible a 9 percent annual interest on the payments.

These mounting charges combined with the man’s ongoing medical expenses exceeded their financial capabilities and they filed for bankruptcy. They must also sell the $3.9 million home they built in order to reimburse their creditors. It is important to note here that many people who file Chapter 7 bankruptcy do not have to give up properties and necessities. However, depending on circumstances, it may be a possibility.

Dealing with debt and the possibility of bankruptcy can be overwhelming for most people. However, with strong legal support throughout the process, a person can wipe away their debt and get a fresh start.

Source: The Huffington Post, “Popcorn Lung Couple, Eric And Cassandra Peoples, Files For Bankruptcy,” Oct. 16, 2012