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Bankruptcy Might Not Be Your Best Option

Bankruptcy Might Not Be Your Best Option
"""The majority of consumers who are facing a mountain of insurmountable debt, as well as students who have graduated from college and must begin repaying their massive student loan debt, may be contemplating bankruptcy in order to start over. However, bankruptcy may not be your best option, and you may not even be eligible to file.

The vast majority of consumer bankruptcies are filed under Chapter 7, which discharges the majority of unsecured debts, which typically includes the majority of credit cards, signature loans, and similar lines of credit. In addition to stopping creditors from contacting you and harassing you at all hours of the day and on weekends, Chapter 7 bankruptcy also halts any wage garnishment proceedings that may be in progress.

However, you must take a close look at the origin of your debts, as there are multiple categories of debts that bankruptcy will not eliminate. If you have pledged collateral to obtain a loan, filing for bankruptcy will not eliminate the debt. If you have federally funded student debt, filing for bankruptcy will not eliminate this form of debt.

One of the requirements of the recently amended bankruptcy laws is that consumers must attend credit counseling. To some extent, this is foolish, as many bankruptcy filings are the result of circumstances beyond the consumer's control, such as enormous medical expenses, a job loss, a messy divorce, etc. In this instance, credit counseling may be of some assistance, but that is not why bankruptcy is being considered. However, credit counseling is obligatory and cannot be avoided.

Contrary to prevalent belief, declaring bankruptcy does not result in the loss of all assets. The federal bankruptcy courts will make an exemption or allowance for you to retain essentials such as your home, car, etc. However, each case is evaluated on an individual basis, so if your current residence is a beachfront condo in Miami and your current vehicle is a late-model Porsche, the court may order you to replace them with something a bit more affordable.

You must understand the consequences of declaring bankruptcy. It will remain on your credit report for seven to ten years and will serve as a major red flag to lenders when you apply for a new line of credit. You can obtain new credit with a little digging, but you will almost undoubtedly pay a higher interest rate until you get your finances in order.

Before filing for bankruptcy, you should comprehensively investigate all available alternatives and options. As a result of the recent changes to the law, it is no longer advisable for you to attempt this on your own. A competent bankruptcy attorney can save you more than you would lose and would be well worth the investment.""

" - https://www.affordablecebu.com/
 

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"Bankruptcy Might Not Be Your Best Option" was written by Mary under the Finance / Wealth category. It has been read 183 times and generated 1 comments. The article was created on and updated on 02 June 2023.
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