CC Brown Law: Due to the difficult economic scenario which has been prevailing for the last few years, a large number of Americans have been struggling to meet their mortgage payment commitments. Many homeowners facing foreclosures are now increasingly evaluating the option of filing for bankruptcy protection in order to either try to stop the foreclosure proceedings or to discharge any debts resulting from the foreclosure. Bankruptcy is a complicated process and after the passage of the Bankruptcy Reform Act in 2005, the level of complexity in the process has increased even more. This has been leading to an increasing number of Americans who are seeking bankruptcy help.
While bankruptcy may offer you an opportunity to start on a clean slate, it would destroy your credit and would most probably force you to sell your assets, in addition to adversely affecting your future employment prospects. Therefore, it is always advisable to avoid bankruptcy in order to preserve your credit. But there may have been different trying circumstances that you may have been facing when it wouldn’t have been so easy to do so. The best course of action when you find yourself in a tricky situation is to immediately get bankruptcy help from a qualified bankruptcy attorney in your state to determine if bankruptcy can help you resolve your foreclosure debts.
If you wish to file for bankruptcy, you must consult with an attorney to find out if bankruptcy will benefit your financial situation. How bankruptcy will affect your debt may based on what type of bankruptcy you are going to file. Generally there are two types of consumer bankruptcy: Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy, which is also called a liquidation bankruptcy; a bankruptcy trustee will examine your assets and sell those that are non-exempt to repay your creditors. A bankruptcy court will then discharge all your remaining unsecured debts including any deficiency balance resulting from your foreclosure. Thus, if you have no non-exempt property, you should be able to keep all of your property. But each state has its own docket of exempt assets, so you should consult with a qualified bankruptcy attorney in your state to find out if Chapter 7 is a workable solution for your situation.
A Chapter 13 bankruptcy, also called a “wage-earner’s bankruptcy” or a “reorganization bankruptcy”, allows you to propose a plan to repay creditors over a period of time–usually five years. After you have given payments to your creditors for five years, any remaining unsecured debts will be discharged. Thus if your assets exceed the exemptions offered by state law, or if you do not qualify for Chapter 7 relief under the means test, which went into effect in 2005 with the Bankruptcy Reform Act, a Chapter 13 bankruptcy may seem to be a better option for you.
A debt relief program can indeed be an innovative solution as a bankruptcy alternative; for customers who are struggling with serious debt. If you are unable to keep up with your monthly payments, and are looking for a program with low payments and a short time-frame to debt freedom, you can check out the debt relief program on our site that will help you save the most possible money and to get you debt freedom in the shortest amount of time. By consulting with one of our debt relief consultants, you could easily find a solution to your debt problems that could be an option to filing for bankruptcy and could save you more money than consumer credit counseling.