Bankruptcy Debt Relief – What You Should Know Before Filing Bankruptcy
Author: adamcouch
When it comes to debt relief, knowledge can be a power. Finding quality legal advice is an excellent first step. Professionals that understand the workings of the legal system are the best sources for advice and they can help you to decide whether bankruptcy is the correct option for you and your situation or not. While it may be easy for an individual to believe that bankruptcy is the only option available, it often turns out not to be the reality.
Filing for bankruptcy can seem very tempting, especially if you have enormous amounts of debt. Many people who are looking for debt relief often view bankruptcy as a practical option. They see the so-called “nuclear option” of going through a costly and damaging bankruptcy proceeding as the best option that is available to them. For some people, it probably is, but you should understand that bankruptcy was never designed to be a fix-all for debt problems. It was put into place for people who, through extreme situations, have no ability to pay back the debts that they have incurred.
Therefore, it is important to learn about the bankruptcy process, the pros and the cons, before you take that step. Before you file for bankruptcy, you should learn all you can, talk to bankruptcy experts, and make sure that you have exhausted all efforts to pay off your debt. Bankruptcy can get you out of debt, but it is a rough road as anyone who has filed for bankruptcy will tell you. Bankruptcy can always be considered as a debt relief option, but it should be considered very carefully before you decide on taking it.
Filing for bankruptcy
It is only advisable to file for bankruptcy debt relief if you have a substantial amount of debt, or if you have a debt that will take you an unreasonable amount of time to pay off. However, before you take that step, you should talk to some bankruptcy experts first. Exhaust all options first, before you blot your credit report with a bankruptcy. If you have tried debt relief programs and other counseling services, and they all say that there is no hope for you, then you can go the route of bankruptcy.
When you file for bankruptcy, your debt will be taken care of and you no longer have to pay those creditors back. However, your credit report will now have a large bankruptcy on it and thus most creditors will not even look into your direction. When you file for bankruptcy, and you have that bankruptcy mark on your credit, it can take seven years for it to come off. So, while bankruptcy may be your only option, you must consider that you may not be able to receive any credit for seven whole years.
Therefore, you must decide which is more important to you. If you can pay your debt in seven years, then perhaps it is better than having that bankruptcy debt relief on your report. If you have so much debt, however, that it will take you ten years or more to pay it, then bankruptcy may be the best option for you.
If you do decide that bankruptcy is the best option for your debt situation, then it is time to figure out which type of bankruptcy that fits your situation and circumstances. In most cases, a Chapter 7 or “Straight bankruptcy” filing is the most common option for every one. By liquidating assets to repay debtors, the debt incurred in most cases can be removed. However, you should know that there are some assets protected from liquidation and some forms of debt cannot be repaid or removed through this form of bankruptcy.
Since the bankruptcy reform in the year of 2005, there are more legal qualifications required to qualify for a Chapter 7 bankruptcy. A knowledgeable and certified legal source can help you through these issues and problems.
There is also the Chapter 13 or “Reorganization” filing option. Overseen by a federal bankruptcy court, it allows indebted individuals to reorganize their debts in an attempt to repay creditors and thus enact debt relief. The purpose of the court is to help individuals to come up with a plan of action to repay the debts they have incurred. The debtors must, at a minimum, come up with a plan to use every cent of disposable income to repay debts or obligations.
Once again, bankruptcy, whatever the method, can have a serious and life-long repercussion. It is not an action to jump into lightly, and you should meet with professionals to determine whether this is the best course of action for you or not. There are other options of debt relief that do not include bankruptcy, and those options may be better for many individuals. Like any other legal matters, proper research, planning, and analysis are necessary to find the correct answer for your unique situation.
Article Source: http://www.articlesbase.com/finance-articles/bankruptcy-debt-relief-what-you-should-know-before-filing-bankruptcy-2785006.html
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debt relief or bankruptcy?
i owe just over $12,000.00 in credit card debt, and at least 4,000 in medical. With some other bills that total over $2,000. Me and my wife make very little money, since i am not working due to surgery. Am i better off with a debt relief program or filing bankruptcy?
What’s worse: Ch. 13 Bankruptcy or using a Debt Relief Agency’s help?
Going through a divorce, have a ton of debt (credit card, unfortunately) and can’t afford the monthly payments while paying for 2 residences (ex is currently not working). Which would have the least harmful effect on my credit: filing for Ch. 13 bankruptcy or contacting a Debt Relief Agency for help?
Can i declare bankruptcy after signing with a debt relief company like “credit solutions”?
Signed with the Credit Solutions a few months ago, and credit card company is still going to take me to court. I can’t afford the payments even with the credit solutions help. What should I do? Can I declare chapter 13?
Bankruptcy or debt relief?
I don’t know if I should file for chapter 7 or use a debt relief agency, I owe around 15k in unsecured debts, and 80k in student loans. I’ve started filling out the paper work to file but, I’m having second thoughts.
Help with bankruptcy or debt relief options?
Im on the fence and i need some insight. Im 27 currently having about 18k total debt from about 4 credit cards. Around 2007 every thing was fine i made about 440 a week with less than 40 hours of work. My main Credit card was 17k limit and credit score was 779. Bought a car on the card for 14k like an idiot because at the time it was worth 24k. tried to make a resell profit for school money, big backfire end of story. went through a period when the recession hit to making only about 750 a month. Spoke with a BankRupt lawyer for that option about 5 months ago, its even taking this long to save 1500 + 150 to protect the car wich i now need for transpo. While im saving is there any advice on options like all these debt relief commercials on tv, is that a better option or has someone tried that route? Also im now kinda making the amount of money i was before the hard times. about 1400 a month again. So would i even be eligible now? if i tired bankruptcy would they say u make enough now to pay this money back, when honestly i cant, cost of living for everything has changed since 07, pretty much paycheck to paycheck with an additional 1200 debt from medical bills thats not included im my total debt. Plz help
bankruptcy!!!
Yes, but I wouldn’t advise it. That ‘credit solution” company is just some third party business you enlisted.
If you can’t anticipate going back to work soon, then file for bankruptcy. If you DO anticipate returning to work soon, then I would seek debt relief instead. Some of those places advertised on TV (where they arrange lower payments and relief) may be useful, but I don’t know anything about them.
While you can list everything, you will likely continue to make payments on stuff such as your car if you want to keep it. I was never in arrears on my vehicle loan, so it wasn’t an issue.
I can also tell you from experience that filing bankruptcy does not destroy your credit. It may just be harder to get lower interest rates. Anyway, places started offering me all sorts of credit less than a year later, but it took 5 years to get the lower interest rates. Student loans, judgements and taxes cannot be eliminated through bankruptcy. You owe it until you are legally disabled or dead.
Also, and very important, pick one national credit card you want to keep and pay that off! Don’t include it in bankruptcy. Everybody needs at least one credit card for emergencies, even if it is just to get a hotel or car rental.
Bankruptcy will not do anything for your student loans. See if you can get your student loans deferred for a bit and work on getting the other debts paid off. Debt relief is going to mess up your credit too. If there is any way you can work a second job or make cut backs to keep caught up, do it.