If you owe so much credit card debt that you are never going to be able to pay it back, it may be time to consider filing for bankruptcy. This is a decision that should never be taken lightly because the damage it will do to your credit rating will be substantial.
You may not realize the far reaching effects that declaring bankruptcy will have on your life. Your credit report will be affected for at least 10 years. Your car insurance will go up, they will now see you as a high risk for non-payment. You may no longer be able to buy homeowners insurance; many companies just will not write a policy to you. Many employers whether fair or not, will not hire new employees with bad credit histories; they feel it shows them that you are unreliable.
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The laws have also change about being able to declare bankruptcy. The standards you must meet before being eligible are set much higher. The federal government made and passed the stricter standards for filing.
Once you have determined that this is the best option for you, you will need to hire an attorney to help you through the quagmire of laws and options. Get an attorney that specializes in bankruptcy law, they will know all the ins and outs of the law. Shop around and get the best attorney for the money you have to spend. Make sure that you take every record of every debt that you owe with you to the meeting; you do not want to leave out any creditor when you file.
They will also help you to determine which type of bankruptcy is the best option for you. There are two types: liquidation, and rehabilitation:
With liquidation, also referred to as Chapter 7 your assets will be seized and auctioned off to pay your creditors. The proceeds from the sale will be split among your creditor to pay off the amount your debts.
The rehabilitation type is known as Chapter 11, 12 or 13. They take all your debts and make offers to your creditors for you to pay back a portion of the debt on a monthly schedule. For instance if you owe $10,000 on a credit card you might offer to pay twenty-five cents on each dollar of debt, making the bill you now owe them $2500. You will then make monthly payment through your attorney's office. Once you have completed the process you will get a bankruptcy release.
Make sure you have weighed out all the pros and cons before you decided that bankruptcy is your best and only course of action to take. It will take a long time to fix your credit score but hopefully the stress from being in that type of financial situation will be substantially relieved.
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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