Have you considered all of your debt relief options? Debt negotiations with a creditor or a type of settlement are two options that can be considered.
However, if you have assets at risk, are being sought by debt collectors or are being sued by a creditor, lets skip right to reviewing the basics about bankruptcy.
The bankruptcy process can seem overwhelming for most people.
The truth is that it really isn't all too complicated.
The trick is knowing a little bit about the process before filing the petition.
Chapter 7 The most sought after type of bankruptcy is Chapter 7.
The reason for the appeal is that most debts are eliminated without requiring much, if any, repayment from you.
However, Chapter 7 isn't right for everyone and may even be detrimental if your financial situation isn't in line with its benefits.
First, filing for Chapter 7 requires you to pass a means test.
This test evaluates your income to the median income level of the state.
If your income is equal to or greater than the median income level of your state, you will not be eligible for Chapter 7.
The reason for this rule is to only allow those with severely limited incomes the ability to have their debts eliminated rather than repaid.
Also, Chapter 7 comes with some added risk to your assets.
Since debts are essentially eliminated, the court may allow for some of your non-essential assets to be liquidated to satisfy the account.
Most of your important and essential assets are protected from liquidation.
However, Chapter 7 may not be able to save your car or home from repossession.
Chapter 13 Filing for Chapter 13 may not always be your first choice, but it could prove to be better in the long run.
Why? Because repaying your debts is your responsibility and future creditors will look more favorably on you for doing so.
Chapter 13 does not have an income restriction, nor does it put assets at risk.
In fact, Chapter 13 is the only way to guarantee your assets are protected while you resolve your liabilities.
In Chapter 13, you develop a repayment plan that rolls all of your debts into one single payment.
All of your eligible creditors are paid from this one payment, which typically lasts three to five years until the payment plan is satisfied.
Even better, you can keep your assets for as long as you maintain your payments.
However, if you have assets at risk, are being sought by debt collectors or are being sued by a creditor, lets skip right to reviewing the basics about bankruptcy.
The bankruptcy process can seem overwhelming for most people.
The truth is that it really isn't all too complicated.
The trick is knowing a little bit about the process before filing the petition.
Chapter 7 The most sought after type of bankruptcy is Chapter 7.
The reason for the appeal is that most debts are eliminated without requiring much, if any, repayment from you.
However, Chapter 7 isn't right for everyone and may even be detrimental if your financial situation isn't in line with its benefits.
First, filing for Chapter 7 requires you to pass a means test.
This test evaluates your income to the median income level of the state.
If your income is equal to or greater than the median income level of your state, you will not be eligible for Chapter 7.
The reason for this rule is to only allow those with severely limited incomes the ability to have their debts eliminated rather than repaid.
Also, Chapter 7 comes with some added risk to your assets.
Since debts are essentially eliminated, the court may allow for some of your non-essential assets to be liquidated to satisfy the account.
Most of your important and essential assets are protected from liquidation.
However, Chapter 7 may not be able to save your car or home from repossession.
Chapter 13 Filing for Chapter 13 may not always be your first choice, but it could prove to be better in the long run.
Why? Because repaying your debts is your responsibility and future creditors will look more favorably on you for doing so.
Chapter 13 does not have an income restriction, nor does it put assets at risk.
In fact, Chapter 13 is the only way to guarantee your assets are protected while you resolve your liabilities.
In Chapter 13, you develop a repayment plan that rolls all of your debts into one single payment.
All of your eligible creditors are paid from this one payment, which typically lasts three to five years until the payment plan is satisfied.
Even better, you can keep your assets for as long as you maintain your payments.
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