FILING FOR BANKRUPTCY
Ignoring and avoiding your debt, or deciding to do nothing, can be detrimental to your finances, not to mention your life as a whole. You will not receive any relief from the debt, or any relief from the harassment of your creditors. Your fees and interest will keep on accruing, and your account collection calls and threats can intensify. Over time, the risk of a lawsuit increases, along with the possibility of wage garnishment.
Ultimately, after ignoring your debts for too long, your bank accounts can be levied, and liens may be placed on your property. Avoiding debt only intensifies the already unavoidable consequences of debt. Filing for bankruptcy is an option you should try to avoid at all costs.
What is Bankruptcy?
Bankruptcy is the most extreme form of debt relief. It is a legal process that allows the debtor (you) to offload outstanding debt (there are certain debts that are not covered). The main reason people choose this option is that it allows the individual to “start over” again financially.
However, there are several negative aspects of bankruptcy. For instance, bankruptcy can follow you on your credit reports for up to 10 years. Since it stays on your credit report, it can also keep you from obtaining a new mortgage for two to three years.
Filing for bankruptcy is never the option you should choose until you have exhausted all your other options. There are many steps you can take to eliminate your debt without filing for bankruptcy, and we’re here to help.
With that in mind, there are two different types of bankruptcy—Chapter 7 and Chapter 13 bankruptcy. In Chapter 7 bankruptcy, many, if not all, your debts are wiped out over a short period of time (3-6 months). With Chapter 13 bankruptcy, you use your income to make payments on your debts over the next three to five years.
Each type of bankruptcy has different requirements for eligibility, and you may be prevented from filing for Chapter 7 bankruptcy if you have enough income to repay your debts in a Chapter 13 plan. On the other hand, you may not qualify for Chapter 13 bankruptcy if your debts are too high or your income is too low.
Contact Us to Avoid Filing for Bankruptcy
Millions of people struggle with intimidating amounts of debt—you are not alone, and there is no need to feel ashamed or embarrassed when it comes to facing your debt. You can start to make a change today with just a phone call or email. We are here to help answer your questions and help you find the solution you need in order to turn your finances around.
Contact our agents at MPowering America today, we look forward to hearing from you and helping you.