Bankruptcy Debt Relief – When To Consider Filing Bankruptcy For Debt Relief

Aug. 21, 2010 - PRLog -- Those among us who have lost their jobs or had their hours cut back face many fears. Many people are struggling to get all their bills paid, and some are on the brink of losing their homes.

It seems that almost everywhere you turn, there are advertisements about "eliminating your debt." It's time to sort out the fact from fiction regarding debt relief and filing bankruptcy. The option you choose can impact your life for years to come.

If you are thinking about filing any form of bankruptcy proceedings, it is wise to hire a bankruptcy attorney. These debt relief experts can help you determine what options are available to you, and which choice is best for your situation. As bankruptcy laws differ between states, it's important to consult with a local attorney to make sure the proceedings are filed correctly.

Many people who desperately need debt relief are concerned about the social stigma of debt relief, fearing that the news of their bankruptcy will be widely published. In the case of celebrities and public figures, this is nearly unavoidable and thus a legitimate issue. For the rest of us, though, few people outside the affected creditors ever become aware of the proceedings.

Many people think that filing bankruptcy eliminates all debts, but this is not necessarily the case. Your attorney can help you decide whether you can fulfill the current means test for making debt repayments through Chapter 13, a wage earners plan, or if a Chapter 7 filing fits your circumstances better. Both the Chapter 7 and Chapter 13 proceedings contain many exclusions where debt is not eliminated, including child support, criminal restitution, and tax liens.

Some people who are considering bankruptcy are concerned about losing their house if they file. However, both Chapter 7 and Chapter 13 often allow you to keep your current home. In fact, a Chapter 13 filing is sometimes initiated specifically to help homeowners stop foreclosure from happening. An experienced bankruptcy lawyer will be able to advise you and ensure that your assets, including your home, is protected to the full extent of the law when filing either of these proceedings.

For some debtors the question of filing in a state in which they don't reside comes up when they are contemplating a move, or where the debt might have been incurred out of state. Residency requirements before you are eligible to use a state's exemptions have now stretched out to two years so it is important to consult with an attorney in the state in which your debts were incurred before changing jurisdictions.

Regardless of the claims you hear on TV, radio, or on the internet, debt relief, whether settling your debts with creditors through negotiating down the balances, or filing for some form of bankruptcy, will impact your credit score. It is fiction that after filing a bankruptcy, your reduction in debt will improve your credit score. The credit bureaus maintain records of all your credit transactions, some for 7 years, some for as long as 10 years. Your credit score will drop, perhaps significantly, after a bankruptcy is filed, and most creditors will show negotiated credit payoffs as "PAID SETTLED" which will also lower your scores.

This doesn't mean that any future credit opportunities are doomed after bankruptcy. It isn't unusual that shortly after discharging your debts you will receive new offers for credit cards again. You can expect it to be much more difficult, if even possible to qualify for property and automobile purchases. If you do qualify, it is likely your rates and terms will be less favorable.

If you do find yourself in a situation where either restructuring or debt relief of some kind is absolutely necessitated, it is strongly recommended that you work with an experienced attorney who can help you understand your options. Your credit score can be improved over time.
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(http://www.deletedebttoday.com)

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Bankruptcy is not the only option if you are struggling financially. Debt settlement is the best alternative to filing bankruptcy. Most consumers are able to eliminate 50% of their unsecured debt while avoiding some of the negative consequences of bankruptcy. If you are on the verge of filing bankruptcy it would be wise to at least look into a debt settlement program.

Check out the following link to speak with a debt relief specialist for a free debt relief consultation. It’s completely free and could save you from filing bankruptcy.
Free Debt Advice
(http://www.deletedebttoday.com)
Or Call - 8008940286