Debt Relief Via Bankruptcy – Facts Vs. Fiction

Those among us who have lost their jobs or had their hours cut back face many fears. Many people are struggling to get all their bills paid, and some are on the brink of losing their homes.

Advertisements for “debt elimination” methods are pervasive in today’s media, popping up just about everywhere. Understanding the difference between fact and fiction regarding debt relief and bankruptcy is critical, as the path you choose now can continue to impact your future for a long time.

If you are thinking about filing any form of bankruptcy proceedings, it is wise to hire a bankruptcy attorney. These debt relief experts can help you determine what options are available to you, and which choice is best for your situation. As bankruptcy laws differ between states, it’s important to consult with a local attorney to make sure the proceedings are filed correctly.

One piece of fiction that many people in need of debt relief worry about, and needlessly procrastinate over, is the possible social stigma of the debt relief proceedings. In the case of celebrities and public figures publicity is almost inevitable, so it is a legitimate concern for them. But the vast number of filings becomes known only to the affected creditors in the process.

If you go through some form of bankruptcy, will this eliminate all your debts? Your attorney can determine whether your financial circumstances meet the current means test for making debt repayments through Chapter 13, a wage earners plan, or if a Chapter 7 filing is more appropriate for you. Both the Chapter 7 and Chapter 13 filings contain many types of debt elimination exclusions such as child support, criminal restitution, and tax liens.

Some people who are considering bankruptcy are concerned about losing their house if they file. However, both Chapter 7 and Chapter 13 often allow you to keep your current home. In fact, a Chapter 13 filing is sometimes initiated specifically to help homeowners stop foreclosure from happening. An experienced bankruptcy lawyer will be able to advise you and ensure that your assets, including your home, is protected to the full extent of the law when filing either of these proceedings.

Some people may find it necessary to file bankruptcy in a state other than the one they live in. This sometimes happens when the debt was incurred in another state, or when they recently moved. It is now required for you to be a legal resident of a state for two years before you are eligible to use that state’s exemptions. Consult with an attorney in the state in which your debts were incurred before changing jurisdictions.

Regardless of the claims you hear on TV, radio, or on the internet, debt relief, whether settling your debts with creditors through negotiating down the balances, or filing for some form of bankruptcy, will impact your credit score. It is fiction that after filing a bankruptcy, your reduction in debt will improve your credit score. The credit bureaus maintain records of all your credit transactions, some for 7 years, some for as long as 10 years. Your credit score will drop, perhaps significantly, after a bankruptcy is filed, and most creditors will show negotiated credit payoffs as “PAID SETTLED” which will also lower your scores.

The possibilities of future credit aren’t destroyed after bankruptcy, though. Shortly after discharging your debts, you may receive new offers for credit cards. It is likely to be far more difficult, if even possible at all, to qualify for car and home loans, and any credit you do qualify for will probably have high rates and less favorable terms.

Nonetheless, if you find that some form of debt relief or restructuring is a necessity, it is wise to work with an attorney to help you understand your options. Over time, you can rebuild your credit.

Need debt relief in the Detroit, Michigan area? Contact A Better Way Bankruptcy. Helpful, compassionate attorneys and professionals can help you with debt relief, stop those calls from creditors and get you moving towards a fresh start. Powered by SEO 2.0 Services