When you financial burdens become unbearable, creditors are calling and sending letters, and you are staring foreclosure in the face most people feel that it is time to declare bankruptcy.

Depending on your situation this could be what you need to do but it is important that you are aware of all the factors involved and how they will affect your life for the next 7-10 years.

A Chapter 7 bankruptcy is for someone who has little income, and few assets other than necessities. If you pass a “means test” to see if you qualify for Chapter 7 all none exempt assets other than necessities like your home or car will be liquidated or turned into cash to pay off your creditors. After that all your unsecured debts are discharged and you no longer have to pay them. This doesn’t include student loans, money owed to the IRS, child support, and loans on property.

Chapter 13 bankruptcy is for someone with a lot of assets they don’t want to lose or someone that doesn’t qualify for Chapter 7 through the “means test” because they have enough income to make payments on their debts. No assets are sold, instead the individual is placed on a payment plan until they pay off their debts normally at a reduced amount. Once paid in full these accounts are discharged from the individual’s personal liability.

Downsides to Bankruptcy

They stay on your credit report for 7-10 years

You can get declined for mortgages, loans, bank accounts, jobs, etc. while it’s on your credit report

Between administrative and attorney fees it can cost on average up to $1500

Your current credit card companies may close your cards

If your assets don’t qualify for exemption they will be ceased and sold

Despite the negative factors a bankruptcy can get you back on your feet from the discharge of the debts, stop collection activity from debt collectors and creditors (it also stops foreclosure activities), gives you a fresh start after that 7-10 year period.

The credit repair process can also clear your credit within a 6 month to a year time frame. Because of the length of time alone credit repair could get you back on track a lot sooner and is worth taking a look at.

Contact:

Clean Slate Credit LLC

Owner-Will Frazier

334-430-5296

www.cleanslatecredit4u.com