When you have overwhelming debt issues, whether it’s medical bills, credit cards or any other type of debt, one of your major debt relief options is Bankruptcy. However, many people believe that the bankruptcy process will not fix their problems, with many worries like:
I won’t be able to get credit after bankruptcy.
Credit scores and the ability to utilize your credit in the wake of bankruptcy is certainly a challenge. However, it is only a temporary one as eventually, Chapter 7 and Chapter 13 Bankruptcies do fall off your report. Unfortunately, it can take Seven or ten years for that to happen, depending on the chapter on bankruptcy. However, you don’t have to wait that long to begin the process of rebuilding your credit.
I will lose everything in bankruptcy.
There are two primary types of bankruptcy styles available to consumers: debt reorganization under Chapter 13 and liquidation bankruptcy under Chapter 7. Reorganization takes all of your debts and builds a new plan that you work to pay down. Liquidation sells off property to make a lump sum payment to clear the debt.
In both cases, you have opportunity to protect some of your assets from the proceedings. Obviously, you won’t be able to cover all of your property. However, the heirloom and possessions you care most about can be saved.
Some of my debts aren’t impacted by Bankruptcy.
Among the debts that tend to be a problem for people, student loan debt, unlike medical debt and other unsecured debts is a primary problem. Student loan debt is not dischargeable and can represent a massive piece of your debt. However, if you’ve got debt problems that lead you to seriously consider Bankruptcy, relief can even help here. It’s a matter of pressure, and you need to have the ability to handle one challenging debt vs. several.
There are long term benefits to Bankruptcy.
Consolidating your debts or liquidating assets to resolve your debts gives you immediate breathing room in your financial life. However, there are long term benefits, too. It can take some time to rebuild, but you end up with a greater understanding of how to balance your debt load vs your disposable income. Additionally, the rebuilding process can lead to even greater opportunities for you down the line.