Bankruptcy With Dignity

Bankruptcy With Dignity

Chapter 13 bankruptcy is often their best option for debtors who decide to stop collection efforts from their creditors but still want to repay their debts. People who have fallen behind in their mortgage payments often choose this option because it allows them a chance to "catch up" before their home is foreclosed upon. Filing for Chapter 13 will stop the collection efforts of all the creditors that the debtor lists on the petition and it allows them a variety of options for repayment, if they meet the eligibility requirements.

Some debts cannot be included in bankruptcy relief. Some of these include student loans and medical bills. For these types of payments a schedule will need to be made to accommodate funds being applied towards paying off this debt.

Normally, a professional debt settlement company is hired to carry out negotiations. This is a good idea, since creditors can be very stubborn in seeking the highest percentage possible. However, a good deal can see the debt slashed to 40% if its actual value. This is often more than filing for bankruptcy achieves, but that too is dependent on other factors.

It took a while to accumulate your debt, and it will take some time to get rid of it. For most consumers, 3 to 5 years is nothing compared to the length of time it would have taken to repay every loan without filing for bankruptcy. A Chapter 13 bankruptcy usually allows you to reduce the amount of debt that you need to pay off by a substantial amount, which gives you the opportunity for a fresh start.

There are several things that you need to consider before filing for Chapter 7. There are a few cases in which you can avoid being forced to file on the grounds that it is abusive. You might be able to opt for Chapter 13 instead, which means you're able to pay off all or some of your debts if you have more time, and if this happens you will not have to have your property and assets sold off.

In an attempt to decrease the number of people filing for bankruptcy, the new law requires that debtors receive counseling from an approved credit counseling agency within six months prior to filing for bankruptcy. The purpose of the counseling is to ensure that people are not making an uninformed decision to file for bankruptcy. It is also the hope of the court that counseling will provide alternative options for those who truly don't need to file.

Filing for bankruptcy within Chapter 7 implies full liquidation of your debts, and therefore, any and all assets you have will be utilised to pay off your existing debt.

There will be full elimination of credit card debt, medical bills, and many loans with a Chapter 7 resolution. Chapter 13 is generally restricted to those who earn wages. These are used to secure payment of premiums on a monthly status at a level that is judged to be something the applicant can afford to give. Taxes, student loans, alimony, child support, and criminal fines will still have to be paid.