When you become incapable of keeping up with all of your creditors’ demands, you are naturally going to consider the possibility of a bankruptcy filing. In many cases, this is the best course of action, but you should understand all of your options so that you make the right decision.
There is a popular misconception that some people have with regard to bankruptcy. They assume that there is no debt repayment plan, because you are essentially waving the white flag as you file for a fresh start. In reality, the matter of repayment will depend upon the type of bankruptcy that is filed. If you can qualify for Chapter 7 bankruptcy, your unsecured debts will usually be discharged.
Chapter 13 Reorganization
A Chapter 13 bankruptcy is a court-ordered repayment plan. You do not have to surrender your property when you file for this type of bankruptcy. Your debt is reorganized, and your disposable income is utilized to pay the debt over a period of 3 to 5 years. You have to pay all of your priority debts, like taxes and child support, under the reorganization plan. Secured debt like your mortgage and car payments will also be prioritized if you decide to keep those items. Depending on the extent of your disposable income and the level of debt that you have, you may be able to pay a reduced amount to satisfy unsecured debts like credit card and medical bills.
Negotiating With Creditors
It is possible to negotiate with some creditors as an alternative to bankruptcy. Your mortgage lender may work with you if you can stay current going forward and make additional monthly payments to correct the arrears. Credit card companies may be willing to make arrangements with you, but some of them are more responsive than others. We have offices in a number of cities throughout the state of Oregon, including Medford, Salem, and Portland. Utility companies in Oregon typically offer deferred debt repayment plans and payment assistance if you are experiencing a hardship.
We are here to help if you will like to set up a case evaluation, and we offer these sessions free of charge. At the consultation we can get to know you, answer your questions, and help you take the appropriate actions if you decide to proceed. To set the wheels in motion, give us a call right now at 1-800-682-9568.