However, if bankruptcy seems to be the only option, you may want to get an attorney to help with filing. To qualify, you must be living below average means according to your state census bureau report. You will also pay for the filing and administrative fees though often times, the fee can be made in installments or completely waived.
A number of bankruptcy options such as chapters 7 and 13 are available for you to choose from. Chapter 13 bankruptcy also known as debt reorganization bankruptcy, allows you to keep your properties as long as you continue to make the agreed-upon payments on time.
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Chapter 7 bankruptcy also known as liquidation or straight bankruptcy, involves selling of all your assets that are not exempt in your state.
If you are able to consolidate your debts, it is best you find a credit counseling agency to help you with debt consolidation. With debt consolidation, you will get lower monthly payments, low interest rate and will be able to keep your property, if you can afford to make the minimum payments.
While consolidation will appear on your credit report and affect your score, your information will not be made public or shared with your employer. It is also possible for you to keep one credit card for emergencies while giving up the rest.
When you file bankruptcy, credit card companies and debt collection agencies will no longer hassle you. However, the bankruptcy will go on public record and may appear on your credit records for up to 10 years, lowering your score by at least 200 points. This implies, you might not qualify for loans for a couple of years, and may in future only qualify for high interest loans.
Also note that chapter 7 bankruptcy will not wipe out all your debt, and you will still have to pay back alimony, taxes, and any fraudulent debt including child support.
As clearly outlined, there are pros and cons of choosing bankruptcy vs debt consolidation. Secured debts like car loans, mortgage, and some personal loans cannot be consolidated. While consolidation will not entirely ruin your credit in the short term, it limits your use of credit cards, and can only help with multiple unsecured debts such as credit card debts from different credit card issuers.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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