Debt Relief or Bankruptcy?
Are the debts sinking it? You are not alone. The level of indebtedness of consumers is higher than ever. Whether your debt problem is caused by illness, unemployment or simply by excessive spending, it can be a crippling situation. In your effort to recover your solvency, stay alert to ads that offer quick solutions. Although the ads offer debt relief, they rarely mention that such relief can be interpreted simply as bankruptcy. And although bankruptcy or bankruptcy is an alternative to deal with the solution of economic problems, it is generally considered as the option of last resort because it has a long-term negative impact on its solvency. The information of a bankruptcy or bankruptcy filing (both the filing date and the discharge of your debts) remains in your credit record for a period of 10 years, and may hinder the granting of credit, obtaining employment, insurance or it may even be a difficulty to get a place to live.
The Federal Trade Commission (FTC) warns consumers to read between lines when faced with advertisements published in newspapers, magazines or telephone directories with phrases such as:
"Consolidate your invoices into a monthly payment without taking out a loan."
"STOP credit harassment, foreclosures, seizures, tax assessments and attachments."
"Keep Your Property."
"Erase your debts! Consolidate your invoices! How? Using the protection and assistance granted by federal law. For once, let the law work in your favor! "
You will find out later that these types of phrases often involve bankruptcy or bankruptcy proceedings, which can affect your credit and represent attorneys' fees.
If you are having difficulty paying your bills, consider these possibilities before considering filing for bankruptcy or bankruptcy.
Talk with your creditors. They may want to work with you in the search for a modified payment plan.
Contact a credit counseling service. These organizations work with you and your creditors to develop debt repayment plans. These plans require that you deposit money monthly to the advisory service; then the service pays its creditors. Some nonprofits charge low fees or provide these services for free.
Carefully consider a second mortgage or a line of credit on the net worth of your mortgage repayment. While these loans may allow you to debt relief, they also require you to submit your home as collateral.
If none of these options is possible, bankruptcy may be the most feasible alternative. There are two primary types of personal bankruptcy: that of Chapter 13 and that of Chapter 7 of the Bankruptcy Law. Both types of bankruptcy must be filed with a federal bankruptcy court. The charges for filing the bankruptcy petition are several hundred dollars.
The consequences of bankruptcy or bankruptcy are significant and require careful consideration. Other factors to consider: As of October 2005, Congress made radical changes to bankruptcy laws. The integral effect of these changes is focused on offering consumers a greater incentive to opt for the discharge of Chapter 13 debts instead of Chapter 7. The Chapter 13 bankruptcy allows you to keep your assets in case you have Stable fixed income, for example you could keep your mortgaged house or a car, that is, the goods that would otherwise have been lost. Through the bankruptcy contemplated in Chapter 13, the court approves a debt repayment plan that allows you to use your future income to pay your debts over a period of three to five years instead of losing any property or property. After making all the payments established by the plan you will receive a discharge of your debts.
The bankruptcy contemplated by Chapter 7, known as direct bankruptcy, involves the liquidation of all assets that are not exempt. Exempt goods may include automobiles, work tools and basic furniture for the home. Some of your assets may be sold by a court-appointed official - a trustee - or reimbursed to your creditors. The new bankruptcy laws have modified the period during which you can receive a discharge under Chapter 7 before you can resubmit a bankruptcy filing under that same chapter. The waiting period established under Chapter 13 is shorter and this term may be two years of waiting between presentations.
Both types of bankruptcy will allow you to get rid of unsecured debts and stop foreclosures, seizures or seizures, confiscations, emplacements, service supply cuts and debt collector activities. Both bankruptcies provide exemptions that allow to keep certain types of assets, the amounts of these exemptions can be variable. Generally, personal bankruptcy does not allow breach of obligations to pay alimony for spouse or child, fines, taxes and some student loan obligations. Also, under Chapter 13, the bankruptcy declaration does not allow you to keep your assets in case your creditor owns an unpaid mortgage or a right over it, unless you have a repayment plan for your debt.
Another important change introduced to the laws applicable to bankruptcy includes certain requirements that must be met before declaring bankruptcy or bankruptcy, whichever chapter you choose. You must receive credit counseling from an organization approved by the government within six months prior to the filing of a bankruptcy case that grants you the discharge of your debts. You can find a list of organizations duly approved by the government in each state on the U.S. website. Trustee Program the dependent organization of the US Department of Justice. that supervises the bankruptcy cases and the acting trustees. In addition, before filing a bankruptcy case under Chapter 7, you must submit a "proof of income and resources" to prove conclusively that your income does not exceed a certain amount. This amount of income varies by state and is published on the U.S.