I am in Debt and I Don’t Think There is a Way Out
When you can no longer keep up with your bills and start to fall behind on your debt, it’s time to act. Debt collectors are calling and threatening to freeze bank accounts, calling employers, and even plan to sue. What can you do if you can’t make the minimum payments and the lender refuses to give you additional time to pay the unpaid bills? Filing for bankruptcy can wipe the slate at the expense of your credit and settling your debts is one alternative but it also has a few drawbacks. The following explanation will give you the fundamental guide on the basics of getting out of debt.
Filing Chapter 7 Bankruptcy
Filing for Chapter 7, your debt is wiped out regardless of much money you owe. Some of the debts which can be eliminated include medical bills, credit card debt, and unsecured loans. To qualify for Chapter 7, you need to meet certain income threshold as it is compared to your total household. The family size is measured to the number of members in the household using Census Bureau data. One major drawback with Chapter 7 is that you will have to give up your assets. These assets are turned over to the bankruptcy trustee who will liquidate them to repay your creditors.
Filing Chapter 13 Bankruptcy
This is another way to eliminate your debts due, however, it requires a little more work. Chapter 7 can be completed within six to ten months, but Chapter 13 can take up to five years to discharge and not all the debt can be included. You’ll be given a payment plan to repay some of your debts, and if you deviate from the payment plan, the case will be dismissed. Unlike Chapter 7, you’ll be able to keep all your assets.
There are many debt relief programs and each one has its own unique pros and cons. While all are effective, a correct program must be chosen upon enrollment to maximize the benefits of getting out of debt. Bу аnаlуzіng уоur financial сараbіlіtіеѕ аnd thе types of debt that you have, Strategic Debt Relief can figure out thе best types of debt relief programs. For instance, people with secured debt are beyond the help of debt settlement. Thіѕ tуре оf рrоgrаm involves stopping payments so уоu can show that уоu are unable tо pay off your debts. When consumers have successfully showed that they are unable to pay off debt, the creditors will most likely grant debt reduction. In a secured debt situation, this wіll not work because the lenders will seize the pledged collateral.
Best Debt Relief for My Debts, Where Do I Go?
Continuing to live with excessive debt such as credit card, medical bills, or even unsecured business loans is hectic.
Putting off your debt to a later date causes more interest to accrue. Here is how you can start:
- If you are behind on your bills call your creditors and tell them to stop calling you and communicate only by mail. This will eliminate stress caused by constant phone calls.
- Accurately compile a list of all unsecured debts with which you need help. Be sure to list all the lenders, outstanding card balances, and monthly payments.
- Prepare a budget by listing your monthly living costs, occasional expenses, and unforeseen or miscellaneous expenses.
- Now eliminate expenses which are wants vs. needs.
- Take your income and subtract all the necessary expenses to see how much you have left over to pay to your creditors.
The above five steps will help you to manage your expenses and you to make additional amount to your lenders to get out of debt faster. If you feel you need help understanding Debt vs. Bankruptcy, don’t hesitate to call us 877-297-4477 for a free consultation.