Bankruptcy

Filing bankruptcy should the last resort option for people looking to resolve their debt issues. The longest lasting disadvantage of filing a bankruptcy is that it will stay on your credit reports for up to ten years, making it difficult and more expensive to obtain consumer loans, credit cards, and/or a mortgage. A bankruptcy filing can also disqualify you from applying for, and getting certain types of jobs.

Bankruptcy filings are also a matter of public record so, in addition to appearing on credit reports for ten years, the details can be accessed by anyone interested obtaining them. To make matters worse, the announcements are typically made in local newspapers for all the world to read.

Since the drastic overhaul of the bankruptcy code in October of 2005, the process carries far fewer benefits for the typical consumer. Prior to the overhaul, most cases went the way of a chapter 7 filing where debts were dismissed and consumers were given a fresh start. The filing could be completed within days and entire process took four to 8 months to complete. Since the overhaul, most bankruptcies end up as chapter 13 filings which are far more onerous, lengthy, and restrictive. A chapter 13 case can take as long to get approved as a chapter 7 case takes to be completed. Instead of dismissal, the consumer will now have a “work out” phase where payments are made to the various creditors. This phase can take anywhere from three to five years to be completed. Additionally, under chapter 13 rules, creditors are enabled to act much more aggressively towards debtors that miss even one payment. For instance, should a consumer miss one mortgage payment, the lender can go back to court to initiate the foreclosure process immediately.

There are many alternatives to the last resort option of filing bankruptcy. To learn how to manage and ultimately eliminate debt without filing bankruptcy call 800 Hope today at (800) 466-1845.

 

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