In the face of financial distress, it’s easy to feel overwhelmed. For this reason, it is essential that you understand what options are accessible when confronting challenging economic predicaments. Despite bankruptcy being a potential option in some scenarios, other possibilities should be explored before jumping into an uninformed conclusion or making decisions out of desperation due to mounting debt. Rest assured, there are resources available for consumers.
Consider Debt Consolidation
Debt consolidation is an appealing solution to reducing payments and total interest. This option allows you to combine all of your debts into one monthly payment with better terms, potentially lowering the cost over time. Not only will this help make paying off debt more realistic but could also put money back in your pocket!
Consider Credit Counseling and Budgeting Services
If you’re seeking an effective way to alleviate your debts, credit counseling or budgeting services can be the solution. These programs collaborate with creditors in order to come up with repayment plans that are beneficial for both sides while ensuring payments remain manageable for consumers. On top of this, they provide advice and assist their clients by constructing a budget plan that will help them get out of debt.
Consider Selling Assets
Are you feeling the financial burden of this recession? Have job loss and debt left you on the brink of foreclosure? You may have assets that can be sold in order to pay down or even completely eliminate your debt. Your house could be the most lucrative asset you possess. However, before making any decisions, think about all of your options and weigh the pros and cons. If your mortgage is one of your financial stressors, you may already have started down a foreclosure road. Discover plenty of information about foreclosure here. If you have the privilege of owning a home with no mortgage, such as one inherited from family, consider selling it to pay off your debts and prevent worse repercussions. If your home holds a significant amount of equity, either through paying down the mortgage or experiencing an increase in value since its original purchase, selling could be advantageous, so long as you have somewhere to lay your head while establishing financial stability.
Considering Bankruptcy
If all other methods of addressing overwhelming debt have been exhausted, bankruptcy may be your only choice. Chapter 7 and chapter 13 bankruptcies are the two paths you can take in this situation. At a glance, they may appear alike:
- Both are subject to federal regulations.
- Both mandate financial education for debtors.
- Both offer the chance to pay off debt.
Nevertheless, there are distinct differences. Chapter 7 Bankruptcy is the speediest and most straightforward type of personal bankruptcy. Without surprise, Chapter 7 bankruptcy is the most frequent type of bankruptcy across the country.
Complying with the Maryland court’s regulations and federal bankruptcy laws, you may anticipate a resolution of your Chapter 7 case in four to six months. When filing for bankruptcy under this chapter, obtaining your “discharge” indicates that the Bankruptcy Court has absolved you from any financial obligations for debts categorized as “dischargeable”.In simpler terms, you are legally absolved from fulfilling your debt obligations once a bankruptcy discharge has been granted.
How much debt can you be relieved of through a Chapter 7 bankruptcy? Thankfully, the majority of your obligations can be wiped away including business debts, outstanding credit card payments, personal loans and medical bills. Though some types of debts are unfortunately exempt from discharge under federal law. When it comes to Chapter 7 bankruptcies, there are certain financial obligations that cannot be eliminated. Alimony and child support payments, taxes owed, as well as student loan debt commonly fall into this category.
Though a court-appointed trustee may dispose of particular assets in order to pay off creditors during Chapter 7 “liquidation”, the majority of people who file for this type of bankruptcy will be able to retain their possessions due either to bankruptcy exemptions or because it is not worth selling them.
Chapter 13 bankruptcy is a consumer-oriented payment plan that allows debtors to craft and adhere to an achievable repayment plan for some or all of their financial obligations.With this form of bankruptcy, individuals can safeguard their residences, vehicles and other assets. To be able to file for bankruptcy protection, these people must provide evidence that they have a steady income stream which will enable them to pay back a portion of their debt as per the court’s decision. When enrolled in a debt repayment plan, all debts must be paid off within three to five years (or up to seven if need be). In exchange for meeting these requirements and remaining compliant, filers are given the security of protection from any creditors or collection attempts during the duration of their repayment program. Chapter 13 bankruptcy is designed to provide individuals and families with another opportunity at financial freedom, while allowing them to keep significant belongings. Ultimately, it can be a powerful tool for getting out from under unmanageable debt.
If considering filing for Chapter 13 or Chapter 7 bankruptcy, it’s essential to consult with a financial advisor or bankruptcy attorney first. Such a decision should not be taken lightly and must be made after assessing all aspects carefully. Prior to filing bankruptcy, debtors must be aware of the procedure, potential risks associated with it, and all types of debts that can be discharged. Most importantly, declaring insolvency is a huge financial choice which should not be taken lightly; therefore comprehending each facet of the process is paramount before one makes a lifelong commitment.
Bankruptcy Should Be The Last Resort
Filing for bankruptcy can have a profoundly detrimental effect on an individual’s financial well-being, credit score and opportunity to procure future financing. The repercussions of this decision often linger long after the process is completed.
The consequences of declaring personal bankruptcy can be dire, with effects that may last for up to 10 years! Such a blemish on one’s credit history makes it difficult or even impossible to obtain financing from lenders. It could also impede their chances of being approved for any type of loan or line of credit in the future. Moreover, the filing may even be visible to certain employers or landlords, which can prove detrimental in their endeavor of procuring employment and renting properties.
Additionally, filing for bankruptcy can be an impediment to obtaining a loan with favorable interest rates. Creditors view it as an indication of financial instability and are less likely to accept the risk that comes with lending someone who has filed for bankruptcy in the past.
Property Pro Solutions Can Help Reduce Debt And Avoid Bankruptcy or Foreclosure
If you’re dealing with financial difficulties, but your home is in a good position, maybe it has substantial equity or you own it entirely, then perhaps selling for quick cash could be the key to reducing debt and regaining control of your finances. Despite some negative perceptions about professional home buyers, many are reputable businesses staffed by knowledgeable professionals. If you’re seeking to sell your property but it is not up-to-date, requires pricey repairs or simply needs a good decluttering and cleaning, Property Pro Solutions can be the ideal option for you. Property Pro Solutions is here to make you a cash offer. If you choose to go along with it, there will be no requirement for any repairs, cleansing, renovations or landscaping – we’ll purchase your home directly as-is! ITo top it off, there are never any hidden fees or commissions and typically the transaction can be completed within a few days. To gain further insight into our company, click here. Discover what makes us unique and how we work. For more information, don’t hesitate to contact us for a no-charge, no-commitment cash quote at 443-775-2768 today!