Ways To Avoid Bankruptcy Which is the best strategy for you? Find out now.
What is Bankruptcy? Bankruptcy is a way of dealing with more debt than you can ever pay back. If you are facing an extreme financial crisis, you may contemplate opting for bankruptcy. It is one of the least popular as well as the most undesirable choice a person can make, but ultimately necessary in some cases You should know all the facts before you declare bankruptcy as it harshly impacts your credit, and causes additional stress.
Chapter7 This form of bankruptcy is the most conventional one filed in the United States and absolves you from any obligation to repay your unsecured debt. You will be rid of all legal and financial responsibility from the debts you previously owe and start your financial life again with a clean slate. You can consider this as a financial rebirth.
Chapter 13 Chapter 13 is also called a ‘wage earner plan’ and is usually appropriate for a person who has income or assets above a certain level. It allows people who have a regular source of income to create a plan to repay all or part of their debt. Depending on the debtor’s income the court determines the length of the plan and no plan can exceed five years. Unfortunately, both types of bankruptcy Chapter 7 and Chapter 13 will have a severe impact on your credit score and lifestyle. The decision to file bankruptcy should not be taken in haste. It is crucial to consult a licensed attorney in your jurisdiction before choosing this option.
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