| Debt Relief Solutions- Bankruptcy Alternatives and | | | | chapter 13 plan. |
| Avoiding Bankruptcy | | | | -- If you have a lot of assets, you want to avoid |
| *This article is for informational purposes and is an | | | | bankruptcy at any cost. Whether it's a car, a home, or |
| example of the average consumer. For your specific | | | | a non-exempt piece of property that is worth a lot of |
| decision as to whether to file bankruptcy or not, you | | | | money, you don't want to file bankruptcy if you have it. |
| will need to speak to an attorney in your state. The | | | | The courts will force you to sell these things in many |
| information here has been collected in the most | | | | cases, leaving you with nothing to call your own. If you |
| correct and proper manner, but there are no | | | | have a savings account or other money stashed in |
| guarantees as to the accuracy of the content of this | | | | retirement accounts or other accounts that aren't |
| article, which is strictly educational.* | | | | exempt, you can't afford to give that all up just for the |
| Most people see bankruptcy as their very own eraser | | | | sake of being out of debt. Having assets is bad when |
| that allows them a 'do-over' in their financial life. This | | | | it comes to being unable to afford debts. You say that |
| free pass to credit relief is not as 'free' as it might | | | | you have no money to pay, while the courts see a |
| seem. Most people realize that bankruptcy filing stays | | | | $400,000 home that you could sell, a $50,000 car that |
| on credit reports for 7-10 years, but most don't realize | | | | is way above the exemption limits, and other property |
| that the debt usually winds up being paid back in most | | | | that can become payment for your debts. You want |
| cases. Chapter 7 bankruptcy does wipe the slate | | | | to make sure that you don't take the easy road for |
| clean, but at the expense of liquidating assets that they | | | | the short term just to sacrifice the outcome in the long |
| might not necessarily want to get rid of. Then there is | | | | run. |
| Chapter 13 bankruptcy, where the debtor is placed on | | | | An example: If you have a home worth $100,000 and |
| a payment plan where all the money has to be repaid | | | | you owe $75.000 on that home, you will be forced to |
| over the course of 3-5 years, and their personal credit | | | | sell it and pay back the mortgage company what you |
| will still be marred by a bankruptcy filing. Sometimes it | | | | owe. You would then take your exemption out of the |
| can be a lose-lose situation. | | | | remaining $25,000 depending on what your state |
| Bankruptcy is not an easy solution. It is actually one of | | | | allows, and use the rest to pay off debts. If your state |
| the most difficult processes to go through, and there is | | | | allows an exemption of $15,000, you will get that and |
| often more hassle than what it is worth when you get | | | | give the other $10,000 to the court to pay off your |
| involved with bankruptcy. Consider other debt relief | | | | debts. The court makes the rules, and you will have to |
| solutions as bankruptcy alternatives if you don't want | | | | follow them if you file bankruptcy. |
| to have to repay your debts and still wind up with bad | | | | -- If creditors can prove that you borrowed money |
| credit or a bankruptcy on your record. To avoid having | | | | with no intent to repay or lied about your income in |
| to pay back debts when filing bankruptcy, here are | | | | order to get higher credit limits, you might want to stay |
| some things that you should keep in mind: | | | | away from bankruptcy. Putting yourself in a situation |
| -- If you make more than the average income in your | | | | like this is just like putting the handcuffs on and |
| state, you will be required to file Chapter 13 instead of | | | | throwing yourself in jail for credit fraud. You will still |
| Chapter 7, which both scars your credit and forces | | | | owe a debt if you do this, plus you'll have a bankruptcy |
| you to repay all of your debts. The courts determine | | | | filed on your credit report, which is never good. The |
| how much 'disposable income' you have and then | | | | case can be dismissed if you are caught committing |
| creates a payment plan based on that amount that | | | | fraud that can be proven, and that's the least of your |
| you are required to pay. Missing even one payment | | | | worries. In order to determine if this is the right solution, |
| can get you booted from the program, leaving your | | | | you want to consult with an attorney to ensure that |
| credit scarred and leaving you with mounds of debt | | | | you are safe. |
| still. Plus, the court might not approve all of your | | | | This article does not constitute or act as a substitute |
| expenses, which might require you to change the way | | | | for legal advice, whether expressed or implied, and is |
| that you live. Say goodbye to expensive cars and | | | | strictly for informational purposes. If you have |
| private schools, because these will be considered | | | | questions regarding your situation, contact an attorney |
| luxuries that you cannot afford when you are put on a | | | | in your state for more information. |