In this economy, many people find themselves facing difficult financial situations. Certain circumstances such as unexpected medical bills, credit card bills, and divorces can surely present further challenges. When the burden of debt becomes overwhelming, many believe filing bankruptcy is their only option. Bankruptcy can be broken up into two categories:
Chapter 13 Bankruptcy- In this type, the debtor proposes a plan to repay creditors over a three to five year period during which the debtor can make up overdue payments on any assets and pay into the plan the equivalent value of any assets not covered by exemptions. Exemptions refer to properties that the law allows for the debtor to keep. The debtor will then make regular payments to creditors through a trustee and will not be discharged of the debt until the payments are complete. The debtor is, however, protected from wage garnishments, lawsuits, and other creditor action while making the payments.
Chapter 7 Bankruptcy-This type requires the collection of the debtor’s assets by a trustee who then distributes the cash obtained from those properties to creditors. In order for creditors to receive any money from the assets, they need to file a claim with the bankruptcy court which will deem their claim justified as it sees fit.
Filing bankruptcy is not only stressful and time consuming, it has more serious consequences. It can impact a credit score for at least six years and nine months, and possibly up to ten years. This will make trying to get one’s life back on track very difficult.
How can bankruptcy be avoided? Debt settlement. We are Debt Aid Processing, one of the nation’s largest and most successful backend processing companies. We are here to offer resources to our affiliate companies in order for them to help their clients free themselves from the chains of debt. Call us today at 800-510-2734 or visit our website at http://www.debtaidprocessing.com
