Is Bankruptcy the Right Choice for me?
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Christian Debt Consolidation Guide - Bankruptcy
Sometimes declaring bankruptcy can be the best solution to your debt problems especially if they are insurmountable. It is not however an easy option and carries consequences which are not always fully explained. In this Christian Debt Consolidation guide article we will provide practical information on bankruptcy but please, please never act without taking professional advice.
There are basically two types of bankruptcy usually available:
Chapter 7 Bankruptcy
Under Chapter 7 you are effectively asking the court to forgive all your debts. You are required to surrender all assets that are not exempt (this varies from state to state). Exempt property will usually include some home furnishings and the tools of your trade. A court appointed trustee will handle this process.
Filing for Chapter 7 Bankruptcy ends any wage garnishments and the harassment from debt collectors. It is however an emotionally charged experience. The appointed trustee screens all of your transactions for an extended period of time. This is pretty humbling often accompanied by feelings of failure.
Chapter 13 Bankruptcy
Under Chapter 13 you may keep a mortgaged house and your car and rather than surrendering all assets you look to pay off debts over a typical 3 to 5 year period.
The court will determine your monthly disposable income and this amount is handed over to the court appointed trustee who in turn allocates the amount to your creditors.
At the end of the term any remaining debts are usually discharged. This may sound a better option than Chapter 7 Bankruptcy but again each case has to be examined on it’s own merits. We all have unique situations and the most appropriate choice (which may not be bankruptcy) will vary according to many different criteria.
I have to be honest and say that filing for bankruptcy should be considered as the option of last resort as the consequences are far reaching. There are other options such as Christian Debt Consolidation, Debt Management Plans, Credit Counseling and Debt Settlement to name some.
Bankruptcy affects your credit report for between 7 & 10 years and even after that period you may still experience difficulties if you are looking to obtain new loans or credit.
Here at the Christian Debt Consolidation Guide one of our guiding principles is to encourage Christians to explore every option to solving debt problems. That’s why, again and again we recommend you seek professional advice from a firm willing to explore all the options. Don’t believe all the advertising hype suggesting one solution will solve all your problems. It takes a combination of many and all of our needs are unique.
Please let Bankruptcy be the option of last resort and only if recommended by a Christian Debt Consolidation Counselor. To do otherwise could leave you with increased debts and an even more intolerable situation.
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