In the past few years the economy of US has seen many changes. As a result, there are many people who took the debts but now they are not able to pay it back. It is not that they are defaulters, but they are actually not able to make the payment as their incomes have lowered down and the interest rates have increased. People are adopting many ways for debt settlements and bankruptcy to experience financial sense for debt relief and to get relieved from financial burden.
Debt settlements and bankruptcy are connected or not? To understand this, we must know the legal details of the term 'bankruptcy.' One says that you can not make the payment at all, and the other says that you can not make it right now. The most important thing to mention here is that bankruptcy makes no financial sense for debt relief. That is because, we live in a myth that it would put down the creditors forever. It will only stop the creditors for a few months. After that they will approach you gain and this time with a lot of distrust and impatience. They would lose the faith in you and would always suspect your intentions to repay the loan.
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Loans are basically of two types, secured and unsecured. In secured loan, you can mortgage a property or any other asset on a collateral basis and in the unsecured loan; you do not give the creditor anything to sell, in case of no payments. Usually, filing a bankruptcy relieves you to such an extent in case of the unsecured loans that your entire amount is reduced to 40-50% of the total amount.
The key thing that we miss out is that filing an application under Chapter 7 or Chapter 13 turns your credit score to negative for 7 years. That means for the next 7 years you would not get any credit card or loans. It would also become a key problem if you need to get a home or a car for yourself or the family. Discussing this matter with an experienced lawyer would help you understand these issues in a better way. Rather than filing a bankruptcy, it would be better to meet a debt consultant. They would guide you in a better way regarding the issue. For instance, you can go for debt consolidation. You can also seek help from the government with the help of Federal grants that have been declared to help the people who have a legal and valid need. Here again you should know that if you have filed a bankruptcy already, the government may reject your plea so, do not make any hasty decision.
Surrendering the extra credit cards and planning your budget at home helps a lot. Also look for some extra income through a part time job or some other resources and submit the proofs of these extra efforts to your creditors. They would understand your dedication to pay and will respect your honesty. This will help to get some more time for repayments.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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