If you are being overwhelmed by ever-spiraling debt, bankruptcy can provide a solution, and the benefits are realized immediately. You get an automatic stay when you file for bankruptcy, and this makes most debt collection efforts come to a halt. The two different types of bankruptcies that most people (who are not in business) use are Chapter 7 and Chapter 13. Under a Chapter 7, unsecured debts like credit card balances and medical bills can be completely discharged. Plus, if you are current on your payments and you don’t have more than $40,000 in equity, you can maintain ownership of your home. The same thing is true for your car with an equity limit of $3000.
With a Chapter 13 bankruptcy, your debts are reorganized, and you make monthly payments over a three-year or five-year period. The court determines how much of your income is “disposable,” and these funds are utilized to make the payments. There are priority debts, and non-priority unsecured debts. If there’s not enough money to make payments on all of the debts, all or some of your unsecured debts may be discharged under Chapter 13.
Before you can get a discharge with either type of bankruptcy, you have to complete an accredited debtor education course. You can see a list of the approved providers if you visit the United States Department of Justice website. The information that you will receive should help you make good choices going forward so that you can avoid post-bankruptcy mistakes and steer clear of future financial problems.
Everyone makes errors, but the key is to learn from them. If you had to file for bankruptcy because you made poor financial decisions, you should certainly go forward with a new perspective once you are given a fresh start. You may be surprised to find out that you can obtain credit cards, a car loan, and even a mortgage after you file for bankruptcy if you act wisely and consistently meet all of your financial responsibilities.
Take Control of Your Financial Future!
A bankruptcy filing can ease the pressure in the present and help you regain control of your financial future. If you are in Portland, Eugene, or Medford, Oregon, we have a bankruptcy law office nearby, and we would be more than glad to provide you with a free consultation. To set up an appointment, call our office toll-free at 800-682-9568.