2 Forms of Debt Relief You Don"t Want to Hear
When you think of debt relief you think about consolidation, settlement and restructuring.
These are all good options to consider when you have debt problems, but there are two other options you can consider.
Read further to see what they are.
The above are useful choices in many instances, but there are some cases that you will need even more protection because your debt is beyond negotiation.
These options are chapter 7 and chapter 13.
If these are not familiar to you these are the two choices the law allows an individual to file in bankruptcy court.
What is the difference? The main difference is who qualifies.
Each state has a median income limit for each family size.
If you are under the limit for your state you can file either chapter, if you are over the limit you can only file chapter 13.
Chapter 7 allows you to discharge all debt (few exceptions) which usually takes a few months after you file.
When finished all your debt is gone, you are debt free.
Of course there are credit repercussions for the next 10 years.
Chapter 13 is a repayment plan set by the courts for the next 4 to 5 years.
After that whatever is outstanding is discharged, you are debt free.
There is one other factor you get with this form of debt relief.
This is called Automatic Stay.
Legally when you are under the protection of the courts the lenders and collectors cannot harass you or file any liens against you.
We say legally because they may still try to collect from you, but now you know your rights and you legally can stop them.
If they don't you can sue them.
Bankruptcy is a form of debt relief with the exception that you are under the courts protection, this is different from the other forms of debt relief.
These are all good options to consider when you have debt problems, but there are two other options you can consider.
Read further to see what they are.
The above are useful choices in many instances, but there are some cases that you will need even more protection because your debt is beyond negotiation.
These options are chapter 7 and chapter 13.
If these are not familiar to you these are the two choices the law allows an individual to file in bankruptcy court.
What is the difference? The main difference is who qualifies.
Each state has a median income limit for each family size.
If you are under the limit for your state you can file either chapter, if you are over the limit you can only file chapter 13.
Chapter 7 allows you to discharge all debt (few exceptions) which usually takes a few months after you file.
When finished all your debt is gone, you are debt free.
Of course there are credit repercussions for the next 10 years.
Chapter 13 is a repayment plan set by the courts for the next 4 to 5 years.
After that whatever is outstanding is discharged, you are debt free.
There is one other factor you get with this form of debt relief.
This is called Automatic Stay.
Legally when you are under the protection of the courts the lenders and collectors cannot harass you or file any liens against you.
We say legally because they may still try to collect from you, but now you know your rights and you legally can stop them.
If they don't you can sue them.
Bankruptcy is a form of debt relief with the exception that you are under the courts protection, this is different from the other forms of debt relief.