Crushing debt is not hard to come by these days. The social norm supports a “get-it-now” mentality instead of saving and having enough to make purchases in cash. Purchasing items on credit allows for faster acquisitions, and low-interest incentives are enough to entice even the most financially responsible individual. However, having too much credit can result in an overwhelming amount of debt. When you are no longer able to make minimum payments month to month, you may want to take a look at filing for bankruptcy.
Chapter 7: Discharge of Debt
A Chapter 7 bankruptcy process writes off debt. In this process, you may be forced to giving up assets, including cash and property, to pay off as much of the deficiency as possible. Creditors with collateral may choose to seize the property if you are in default on those payments. Credit cards and unsecured lines of credit may not be able to collect since they have no property claims. A bankruptcy lawyer orlando fl may offer other information including property that you qualify to retain during the proceedings. Since Chapter 7 excuses debt, its implications may linger on your credit report for up to a decade, hindering your ability to get favorable financing terms during that time.
Chapter 13: Repayment of Debt
Under Chapter 13, you and your creditors meet in an attempt to reach a settlement and mutually beneficial repayment plan. This may mean creditors take less than what you owe to come to favorable terms. You must complete this repayment plan within five years, and the conditions must be adhered to, or else you will not be successful. Once the payment plan is complete under the agreed-to terms, the remaining debt is discharged. Chapter 13 has a slightly less impact on your credit as you have paid back some or even all of your outstanding creditors.
Deciding to declare bankruptcy is a personal decision, and you should make the best decision for you and your family.