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How does debt consolidation triumph bankruptcy as a debt relief option?
When you’re knee deep in credit card debt and the present unemployment rate has taken a toll on your personal finances, you usually think about filing bankruptcy. It has been seen that most debtors choose Chapter 13 bankruptcy over Chapter 7 as they do not require forfeiting their property. However, have you ever considered the pitfalls of filing bankruptcy before taking the plunge? Probably never, and this is the reason for the rising number of bankrupts in the US. You can certainly take resort to the debt consolidation programs as it is possible to repay the entire amount but in affordable monthly payments. If you’ve always heard about the positives of Chapter 13 bankruptcy and the negatives of debt consolidation, it’s time to reconsider your thoughts. Read on to do so.
testSome disadvantages of bankruptcy that you won’t face in debt consolidation
lsBoth Chapter 13 bankruptcy and debt consolidation offer the same benefit if restructuring your debt and they share the same goal of making the monthly payments affordable for you for a stipulated period of time. Although you may have heard that Chapter 13 bankruptcy is certainly better than debt consolidation, check out some disadvantages of the former option.
* It will trash your credit score: The biggest concern of the debtors before choosing a debt relief option is usually the effect on the credit score. A Chapter 13 bankruptcy will literally trash your credit score and will stay on your credit report for the next 7 years as you fail to repay what you owe as per the agreements with the credit card companies. On the other hand debt consolidation will not hurt your score as you’re repaying the entire amount.
* Creditors will not trust you in future: Even after all your debts are discharged in the future, if you apply for a loan, the creditor will be skeptical about your repayment ability. As you’ve already been a bankrupt previously, they may charge you outrageously high interest rates to reduce their level of risk in lending you a new line of credit. You won’t face such an embarrassing situation if you opt for debt consolidation.
* You’ll be put on a tight budget: Since the time you file bankruptcy, you’ll be put on a tight budget and hence you have to live by pinching your pennies. However, with debt consolidation, you need not stay on a tight budget but you must manage your finances so that you don’t miss your payments.
* Legal fees are very high: You may be charged a huge amount as the legal fees when you file bankruptcy and this may just be a waste of money. If you opt for debt consolidation, there will be no such fees other than nominal fees that you may have to pay for availing their services
Thus, if you’re still oscillating between choosing debt consolidation programs or bankruptcy, take into account the above mentioned points. Don’t trash your credit score and emerge unworthy of getting loans at an affordable rate by filing bankruptcy when you already have the option of combining your debts and paying them off.
^ Jump to Top ^Explanation of the new Bankruptcy Law
October 17, 2005, new http://bankruptcy-lawfirm.net/files/2011/05/21394_bankruptcy_law_2805825102_01aa01dca3_m.jpg came into force, changing the bankruptcy process in the United States. This new change in the law requires additional steps to be taken by the attorney and the debtor, but is aimed at benefiting debtors. The following information explains the changes in the law and how they will affect anyone considering bankruptcy.
Documentation
Documentation required for bankruptcy has increased, asking the debtor to provide additional information to all the details of their income and expenses. If expenses exceed the IRS allowance, a document of “special circumstances” must be submitted explaining the reasons for additional expenditure. A precision statement shall also be submitted to document special circumstances. Additional documentation makes the task of presenting take longer, but provides more accuracy to the debtor’s financial dilemma. This could result in further debt relief.
Counselling
In an attempt to reduce the number of people filing for bankruptcy, the new law requires debtors receive advice from a credit counseling agency approved within six months preceding the bankruptcy filing. The purpose of counseling is to ensure that people do not take an uninformed decision to declare bankruptcy. It is also hoped the court that the counseling offered alternative options for those who do not really need the file.
testThe evidence
Before the new law, consultation with an attorney to allow the customer to choose which type of bankruptcy they felt best suited them. However, the new law is framed to reduce the number of filings under Chapter 7 only allows people who fall under their state’s median income, adjusted for family size and inflation, and people who meet rigorous standards in the means test to file for it. The rest of the people who do not meet these standards should be evaluated by a series of complex formulas, mathematical change each year to coincide with new income and expenditure rules. Customers who do not qualify through the evidence must be filed for Chapter 13 bankruptcy. The new law also extended the deadline from Chapter 13 three to five years to a mandatory penalty of five years. During the mandatory period of five years, the customer must be monitored and accounted for before they can receive their discharge.
The effects of the new law that the bankruptcy process more complex, requiring lawyers specializing in http://bankruptcy-lawfirm.net/files/2011/05/21394_bankruptcy_law_2805825102_01aa01dca3_m.jpg. To fully understand how the new http://bankruptcy-lawfirm.net/files/2011/05/21394_bankruptcy_law_2805825102_01aa01dca3_m.jpgs in your state may affect its debt and affect your life, talk to a local bankruptcy attorney.
The effects of the new law that the bankruptcy process more complex, requiring lawyers specializing in http://bankruptcy-lawfirm.net/files/2011/05/21394_bankruptcy_law_2805825102_01aa01dca3_m.jpg in North Carolina. To fully understand how the new http://bankruptcy-lawfirm.net/files/2011/05/21394_bankruptcy_law_2805825102_01aa01dca3_m.jpgs in your state may affect its debt and affect your life, talk to a local bankruptcy attorney. If you live in North Carolina, who wants a North Carolina lawyer who understands how to break the law effects. To contact a bankruptcy attorney in North Carolina that will take your case from start to finish, contact the lawyers of The Law Offices of John T Orcutt or billbills.com visit. Behind the lyrics? Running out of options? Attorney John Orcutt has helped 40,000 families. Call 1-800-899-1414 for a free consultation. Ask about our plan mo /.
Brian Reed
. Carolina http://bankruptcy-lawfirm.net/files/2011/05/21394_bankruptcy_law_2805825102_01aa01dca3_m.jpg When it comes to filing for bankruptcy in North Carolina, lawyers for the Law Offices of John T Orcutt know what they’re doing and know how to do it right the first time.
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^ Jump to Top ^Bankruptcy Law??
Question by happy feet: Bankruptcy Law??
I have a vehicle which is listed on my Chapter 13.
But do I get the title to the vehicle when I
finish paying the Bankruptcy Court???
How & when??
Best answer:
Answer by wizjp
Title will be issued by the lender after final discharge of the debt is signed off by the court. Generally takes 90-180 days
Add your own answer in the comments!
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