Debt is never fun to think about and even less fun to take action on. It can be difficult to look at yourself in the mirror and recognize you have too much debt to handle. However, bankruptcy exists to help American consumers such as yourself get out from under the intense pressure of overbearing debt. And here you probably thought bankruptcy was financial suicide.
It’s not. In fact, it can be thought of as a rebirth as bankruptcy allows you to start fresh with a debt free life and your work cut out for you in terms of rebuilding credit. How does this work? Well, it works in two ways:
• Chapter 7. This type of bankruptcy is also known as “straight bankruptcy” and entails the court appointed trustee selling off your nonexempt assets and paying off your creditors with the proceeds. All dischargeable debts are absolved at the end of this 4-6 month long process.
• Chapter 13. This type of bankruptcy is for those who have steady income and entails all your debts being reorganized under a restructured payment plan that can take no longer than five years. After five years all dischargeable debts are absolved.
NOTE: Not all debts are dischargeable. Student loans, back taxes, alimony, and child support are a few debts that are generally not dischargeable and therefore must be honored even after the bankruptcy has concluded.
“Should I File Bankruptcy?”
You will want to talk to a licensed bankruptcy attorney in your area about whether or not bankruptcy is the right decision for you. There are debt solution alternatives which are less taxing on your credit. Bankruptcy can negatively affect your credit for up to 10 years after filing. Talking to a local bankruptcy attorney is crucial because bankruptcy law differs from state to state.
