Going Bankrupt

Categorized: Credit Card Debt Help | No comments

Going Bankrupt can be tough decision, in tough economic times it is one many will consider. There are two main types of personal bankruptcy filings, chapter 7 and chapter 13. Filing chapter 7 allows all of the debtor’s creditors to be wiped out and gives the debtor a fresh start. Chapter 13 is a reorganization of debts and creditors are repaid over a period of time usually five years or less.

Filing a chapter seven bankruptcy is the preferred since you do not have to repay the debt. You may not have a lot of assets in order to qualify for a chapter 7 bankruptcy, which is why many people are advised by their attorney to file a chapter thirteen bankruptcy.

Debt settlement, bad debt remortgage, or consumer credit counseling type repayment plans are great alternatives for those that cannot qualify for a chapter seven filing. They offer quicker repayment plans, the ability to discount the amount repaid to creditors, and you won’t have a bankruptcy on your credit record.

Many borrowers file chapter thirteen bankruptcies in order to stall foreclosure sales on real estate. Some even do this without any intention of following through with the Chapter 13 repayment plan just to buy a few extra months, then the bankruptcy gets dismissed.

Make sure to speak with several professionals to help you decide which debt relief plan is right for your situation. You should talk to attorneys, mortgage professionals, debt settlement companies, and consumer credit counseling agencies before entering into any kind of debt relief plan or bankruptcy.

Bankruptcy is a decision that may affect your credit history and ability to borrow for many years to come, think it through and even if you don’t end up filing bankruptcy make sure to come up with a plan to clear debt. Try earning extra money and cutting unnecessary expenses, you might be surprised how much left over income there will be at the end of the month. Talk with you creditors before you do anything they may be willing to work out a debt repayment plan that will work with the extra money you have after living expenses.


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