Are you deep in debt?
Are your creditors threatening to sue you?
Are you facing foreclosure on your home?
Good credit is important, now and in the future. In most cases, it takes seven years for accurate, negative information to be deleted from a credit report. Bankruptcy information takes even longer to be deleted – 10 years. Bankruptcy may affect your job and loan applications because job and credit applications sometimes require you to declare if you have filed for bankruptcy in the past.
Bankruptcy allows you to:
- Get out of debt quickly
- Immediately stop all collections
- Prevent wage garnishments
- Bring a halt to legal action
- Stop foreclosure on your home
- Eliminate interest and penalties on tax debt
- Find the best bankruptcy alternatives
Chapter 7 Bankruptcy
A Chapter 7 bankruptcy involves discharging all qualifying debts so that you no longer have to make payments. In order to qualify for Chapter 7 bankruptcy, you must undergo a means test, during which the bankruptcy court will determine your ability to repay your debts. If you earn less than average for your state and cannot afford to pay a minimum monthly payment, you may qualify for Chapter 7 bankruptcy.
If you do not qualify for Chapter 7 bankruptcy, you will be forced to liquidate all non-exempt assets to help pay your creditors. Assets exempted from liquidation include your primary residence, tools, work equipment, vehicles and certain items of personal property.
A discharge typically eliminates unsecured debts like credit cards, medical bills, personal loans, car accident judgments, some tax debts and garnishments. Non-dischargeable debts include child support, most student loans and most tax debts.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy involves restructuring your debts and making an affordable monthly payment to a court-appointed trustee for 3-5 years. Your debts are not discharged in Chapter 13 bankruptcy. Yet the amount you pay is determined by subtracting reasonable living expenses from your income, so your payments are affordable. A Chapter 13 bankruptcy may be your only bankruptcy option if you earn more than the average in your state or if you are able to pay a minimum monthly payment.
A Chapter 13 bankruptcy may be a good option if you simply need to stop all collection and legal action and restructure more affordable payment arrangements. Chapter 13 bankruptcy may also be a good choice if you’ve suffered short-term financial setbacks as a result of illness, job loss or unexpected expenses.
If you feel that bankruptcy is your best option, it is best that you consult with a bankruptcy attorney who can walk you through the process.
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