Bankruptcy and Debt Relief: When Bankruptcy May Be Needed

Consumer debt happens to be the most common form of debt in the country nowadays. That’s normal and acceptable especially in our very commercialistic approach to life in this day and age.  On the other hand, if your debt gets out of hand, then that means TROUBLE. This problem could be attributed to circumstances such as unemployment, illness, divorce lack of savings or simply, overspending.

Whatever the cause of your debt is, you have to get yourself out of the burden it’s giving you. In this dilemma, you have the option of filing bankruptcy as your method for debt relief. In most cases, a lot of people file for bankruptcy as the last and most viable resort. Thus, if you’re looking to go down this road, it’s better to educate yourself about the nature of bankruptcy and when it can be considered as the method for debt relief:

Bankruptcy as a Constitutional Right. 

 A lot of people think that filing for bankruptcy could be the lowest and most embarrassing point in your financial life. Nevertheless, don’t be too hard on yourself if you need to resort to this method of debt relief as sometimes it’s unavoidable.

Constitutional Right.

The fact that it’s in our Constitution, this implies that our Founding Fathers must have acknowledged the inclusion of debts in our lives and the role that bankruptcy plays in redeeming us from the burden of our debts.

Bankruptcy as an Option for Debt Settlement

 In case your negotiation with your creditors or lenders to construct a modified payment plan fell through, then you can file for bankruptcy as your last resort. There is no harm in trying if you want to discuss with your creditors and lenders a workable modified payment scheme. You just have to be transparent and honest about your financial situation and tell it to them upfront. Work out something that would benefit both your creditors or lenders and you.

However, even if you have laid down your cards correctly and the negotiations fell through, then bankruptcy would be a possible alternative. You have to decide later to file for bankruptcy and prepare for courtroom appearances. Aside from that, you have to be ready for the consequences of filing bankruptcy.

Bankruptcy and its Two Faces

Bankruptcy is a legal process that offers a person to ease up their financial problem by eliminating their debt or restructuring their debt payment plan. Before you file for bankruptcy, you need to consult a bankruptcy attorney to assess your financial burden.

There are several types of bankruptcy that are under the Bankruptcy Code of the Constitution. Out of these, only two apply to consumer debts. These are Chapter 7 and Chapter 13 Bankruptcy types. To qualify for either of these, you have to undergo a Means Test which determines if your income is fitted for Chapter 7 or Chapter 13 bankruptcy types.

Chapter 7 Bankruptcy

 This type of bankruptcy will help you remove your debts such as credit cards, utilities and medical bills to name a few. What is so good about this type is that upon the filing of this, you would then immediately get protection from the court and debt collectors will be barred from calling you, suing you or re-possessing your properties.

However, this type doesn’t have the power to eliminate other debts, and these are alimony, child support, taxes, student loans, and criminal restitution. Although this kind may not protect your house, car, house furnishings, and work-related tools from foreclosures or re-possessions, your luxury items and accessories would be collected by the court and would be distributed to your creditors equally to cover payment for any of those debts that can’t be eliminated by Chapter 7. That’s why it’s called for the Liquidation Bankruptcy. In addition to these, this type of record stays on your credit report for seven years.

Chapter 13 Bankruptcy

On the other hand, if you don’t qualify for Chapter 7 bankruptcy for the reason that you have a stable and higher disposable income, then you would be advised to file for Chapter 13 bankruptcy. This allows you to keep your properties while you’re under a new repayment plan that would require you to pay your debts without interests and penalties in 3 to 5 years. If you follow this plan, automatically you would receive a discharge of debts at the end. This one offers you court protection from debt collectors. This one stays on your credit report for ten years.

Now that you have a simple and clear understanding of when to file bankruptcy, you must now choose which type would work to your advantage.

Some of the Best Credit Repair Services

Credit repair service is a great company that can help you with your bad credit score. This company is very useful to help you repair your credit score in your daily life quickly and properly. There are some professional credit repair service companies that are available in the United States these days. It means that you need to compare all available companies, so you should be able to take a look at these companies and their available options. This article is going to show you about some of the best credit repair services that you can select for supporting your needs now.

The following are the best credit repair services around

1. Lexington Law

lexington law firmWhen you want to find a good credit repair company, you can look at this service. According to the Lexington law firm reviews by AAACreditGuide, Lexington is one of best credit repair companies that you can hire today. This company has many useful benefits for all customers. It has about 20 years of experience in helping all clients repair their credit score quickly. This company is very well-known for its excellent BBB score and rating. Many people leave good reviews about this credit repair service company today. There are more than 500,000 happy customers who are satisfied with all great services and options from this company. Contact Lexington Law for asking about free consultation from this company.

2. Sky Blue Credit

credit repairThis is another popular credit repair company that you can select today. This company is very well-known and also famous among many customers nowadays. It has A+ rating from Better Business Bureau (BBB) association. This rating can show the overall performance and also service quality from this company. You should be able to see positive results in less than 6 months. This quick recovery process is very attractive for most users these days. This company also works with major credit bureaus, including Transunion, Equifax, and also Experian, in order to provide the best service for all customers.

3. The Credit People

thecredit peopleThis company is ready to help you clean up your credit report quickly. You should be able to raise your credit score easily when you work with this company. This company has more than 14 years of experience in this credit repair area. Therefore, you are able to rely on the overall service quality from this credit repair service company. This company is familiar with the whole recovery process, all necessary regulations, and many other important details for improving your credit score. When you use this service, you are able to enjoy its satisfaction guarantee that is offered by this credit repair service.

Before you select the best credit repair service for yourself, you can contact some of the best credit repair services above. You also need to read some reviews that usually come from other clients. These customers’ reviews can give you clear insight about all available credit repair service companies that are available now. Most reputable companies usually know how to offer high quality and great service for all customers. You need to contact your favorite company, so you are able to discuss about your financial situation and condition easily.