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Bankruptcy is used when all other possible options have been exhausted. |
The reasons for this are many, but the biggest reason to keep it last is that it can stay as a negative mark on your credit report for up to 10 years. Your interest rates will be higher and you will appear to be bigger risk to most lenders. Another big negative is that anyone can find out about your bankruptcy, because it is part of the public record.
However, maybe you are at the end of your financial rope and you are looking for a solution, consider carefully the information on this page.
A
quick overview
Bankruptcy is a method
used to stop all creditors from being able to collect what you owe them.
Court papers are filed by the debtor and the creditors and a judge will
decide whether you are "bankrupt" or not. After you are considered
bankrupt by the judge, you are declared free of your debt.
Depending
on your filing method, you lose most of your possessions to the court, who
sells them and pays as much as possible your creditors and/or you have to
agree to a repayment plan. Some debts are not dischargeable thru
bankruptcy like student loans, alimony, child support and of course, taxes.
Now, let's
quickly look at the most typical types of consumer bankruptcy.
Chapter 7 - Simply put, you lose almost all your possessions (maybe keep your house (depends on the state) and some other things), but are free from any debt you may have incurred prior to filing. The court sells your non-exempt items to pay your creditors, but the creditors can never come back to collect that debt from you.
Chapter 13 - This is typically a repayment plan mandated by the court. Depending on the court's discretion, and your financial condition, the court may release you from some of your debt, but will require a portion (or all) of your debt to be repaid. The court will require a strict budget to be followed, and will not allow you to take on new debt for the life of the program, up to 5 years.
Why not avoid all this and
settle your debt
before heading to the courts?
I did and I'm nearly debt-free! Click here to see my successful settlements.
Debt Settlement is an alternative
Using a debt settlement program
through a reputable and qualified company will save you thousands of
dollars, hassles with lawyers and courts (not to mention fees), a lot of
stress, and that big black mark on your credit.
Become debt free in under 2 years by negotiating settlements with your creditors for less than full balance.
It's faster and far less painful than bankruptcy.
If you've got questions about debt settlement, Find your answer here.
Related Articles:
How Debt Settlement can
save you thousands
Learn more about the benefits of debt settlement, how it
works, and how it
may help you avoid bankruptcy and get out of debt,
Why I Chose Debt
Settlement
These are the reasons that it was my choice to kick off my
journey out of debt.
My Settlements
Look here to see how much I saved by avoiding bankruptcy and
using debt settlement.
Credit
Counseling - How Can it Help Me?
It can help save you from bankruptcy, but what are it's real advantages and
disadvantages? Get all the facts here.
Finding a Reputable Credit
Counseling Agency
There are several things that you should do
when looking for the right consumer credit counseling agency.
Debt
Consolidation
Learn the benefits and drawbacks of the most popular form of debt management and
debt relief out there.
Debt Consolidation Loans
Depending on the type of debt you have, there can be many choices out there that
will help solve your debt problems. Learn about the most common types of
debt consolidation loans here.
The
Debt Snowball Method
Get rid of all your debt - including your mortgage in record time using the
money you currently earn! It's possible to create an avalanche of debt
relief!
Bankruptcy Facts
Find out about bankruptcy, common types, and it's impact on
your finances and your life.
Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005
Learn about this important piece of legislation and how it
will affect millions of Americans.
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Personal Money Management Basics
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Did You Know... |
49% of adults, and 66% of US high school students got F's on a national test on their knowledge of basic economic principles.
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Food for Thought... |
"I'd rather go to bed without supper than rise in debt."
-Ben Franklin.
