If you are burdened by financial expenses, such as credit card debt, medical expenses and mortgages, you may find relief through bankruptcy. While there are several types of bankruptcy available, Chapter 13 allows you to keep your property while you continue to make payments on your homes and vehicles. This debt reorganization plan helps people restructure their debt in a way that reduces their payments, and gives them three to five years to repay the unsecured debt. At The Law of Douglas J. Powell, P.C., we understand the dramatic effects that Chapter 13 bankruptcy can have on your credit score, and how bankruptcy may help to relieve your debt.
When people think of debt relief, they may automatically think of bankruptcy. However, bankruptcy is not the only option for relieving people of their debt. It is easy for people to accumulate medical expenses, credit card debt, student loans and bills. Yet coming out from underneath that debt can be difficult and take time. The Federal Trade Commission lists several debt relief alternatives for consumers to choose from.
If you filed for bankruptcy, you are not alone. In 2016, more than 833,500 people found financial freedom by declaring bankruptcy in the United States. People who were overwhelmed with excessive credit card debt, medical expenses, bills, mortgages and other payments were able to clear or repay their debts through bankruptcy. Although this form of debt relief allows people to begin again, it often causes a giant red mark on your credit report for an additional 10 years once your bankruptcy is discharged. This negative credit report can make it difficult to qualify for loans, professional licenses and purchase a home for your family. Fortunately, there are several things you can do to rebuild your credit.
If you are considering bankruptcy as a way to free you from extensive amounts of debt, you will want to consider all of the types of bankruptcy before deciding which is right for your particular situation. Chapter 7, or liquidation bankruptcy, is the most common in the United States, as it allows people to discharge their debt and move on with their lives. This type of bankruptcy, however, comes with the risk of losing property. According to U.S. Courts, the trustee presiding over the case has the ability to repossess and sell unprotected property, then redistribute the funds to creditors as partial repayment of debt. It is important to know exactly how this liquidation bankruptcy works.
Credit card debt is one of the largest forms of debt in Texas and across the United States. In addition to other forms of debt, such as medical expenses, student loans and mortgages, people can accrue massive amounts of credit card debt when creditors continue to supply people with high-limit credit cards. The problem exists in the fact that people are spending more than they have, and these cards often come with high interest rates and annual fees.
Whether you've been living in your Austin home for only a few years or have enjoyed residence in your community for decades, facing a serious financial crisis that threatens foreclosure is never easy. In fact, it can be quite scary and overwhelming, especially if you think everything you've worked so hard to own might be at stake. The need for immediate debt relief is nothing new, as many business and/or homeowners have been where you are now. But finding the right solution to a particular problem can be quite challenging.