Millions of individuals are in debt, wondering how they will fight the creditors off their door steps and off their telephones. Often times it comes down to choosing one important payment or the other – and creditors can be very unforgiving when seeking payment. It’s not difficult to determine why so many individuals who are in debt consider bankruptcy.
Bankruptcy Can be Considered a Last Resort
Bankruptcy should be considered a ‘last resort’ option. While it often seems like the easy way out, it’s truly not. This filing will stay on a credit report for a minimum of seven years, and most lenders and creditors are not likely to give credit to someone who have filed bankrupt. It’s more difficult to consider someone a ‘worthy’ credit risk if they were unable to pay their bills in the past. For this reason, a bankrupt filing should be the last resort when nothing else is going to work.
The Different Types of Bankruptcy
There are two main types of bankruptcy for individuals; Chapter 13 Bankruptcy and Chapter 7 Bankruptcy. Most individuals don’t know or understand what the difference is but for those who are considering filing bankruptcy, that difference is important. Chapter 13 is for typical individuals who make a regular income. Typically, their bankruptcy plan involves a debt payment program where the individual pays the bankruptcy fees as well as existing creditors for a determined amount of time usually lasting from three to five years.
Chapter 7 bankruptcy is typically when the individual in debt liquidates a portion of his or her assets in order to pay off the debt which is owed. After this process, the individual in debt typically has the remainder of his or her unpaid debt canceled and removed from his or her credit report. Learn more about the different types at UpBankruptcy.
Non-Dischargeable Debts Can't Be Canceled
Even with bankruptcy, some debts cannot be canceled. These are called non-dischargeable debts. Some of these types of debts include child support, unpaid taxes and debts owed to the government, and child support. If the majority of the debt from the individual is this type of debt, filing bankrupt will not be a large help. What it can do in situations like this is help the debtor free up his or her finances from other debts so that he or she can take care of the non-dischargeable debts.
Contact Attorneys to Help You File
Attorneys are important when it comes to filing. These attorneys work with the bankruptcy laws daily and know the ins and outs as well as how best to help the individual in debt. There are typically some monthly fees involved in securing a bankruptcy attorney but it is recommended in order to ensure that the documents filed are legitimate and that the bankruptcy is legal and valid. Learn more at Super Pages.
By using the information above, individuals can determine whether bankruptcy is the best choice for their unique situations and what type of bankruptcy they should file.
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