Stay Away From BankruptcyBankruptcy, not the answer Martin Rogers
What is
bankruptcy? Bankruptcy,
in legal terms means that a person or organization is unable to pay creditors. The
main objectives of bankruptcy are: - To allow
honest debtors a new start - To start
repaying debts in a period of time that fits the debtor Several
kinds of bankruptcy exist; Chapter 1, Chapter 3, Chapter 5, Chapter 7, Chapter
9, Chapter 11, Chapter 12 and Chapter 13, but above all, Chapter 7 and Chapter
13 are the most used. Here are
some useful differences: Chapter 7: removes
nearly all of your debt, it applies to: credit card debt, unsecured debt,
repossession balance, and some others.
Your creditors won’t be bothering you anymore. In order to be able to apply for Chapter 7
bankruptcy you have to prove to the court that you do not have enough money to
pay your debtors and your expenses. Chapter 13:
whoever has a monthly income can apply for this case. Creditors receive payments from a pre defined
trustee where the debtor has made previous payments. When a person applies for Chapter 13 the bank
takes care of the creditors and stops all collecting calls. This type of bankruptcy is applied for those
who do not have enough monthly income or have already applied for Chapter 7
bankruptcy, within 6 years. Effects of
Bankruptcy These are
some secondary effects of filling bankruptcy: 1. After filing
for bankruptcy, all of your possessions will be in charge of the trustee. 2. Your
credit history will be damaged by bankruptcy; it will appear on your credit
report for as long as 10 years. 3. The
possibility of getting loans approved will be lowered, because all creditors
will first check your credit report where the bankruptcy shows. Everybody
thinks that filing for bankruptcy is the best and more accurate solution for
becoming a debt free person, but they are wrong, bankruptcy will degrade your
social status, and all possible options to settle something will disappear, you
will get stressed out; even, some operating cost can not be fixed by applying for
bankruptcy. Debt
consolidation vs. Bankruptcy 1.
Bankruptcy is known for being a momentary way out of your debt problems, on the
other hand, debt consolidation is an everlasting solution that surely will make
you debt free. 2. By
choosing debt consolidation you will maintain your credit report clean; you
will be able to reduce your debts making monthly, comfortable payments and you
will not continue receiving calls from your creditors. The
decision is up to you, which way you will choose, but before making any sudden
decisions remember to always receive guidance from professionals. Check these
links to learn more: |
Add comment (Comments: 0) |   |