subject: Debt Relief Services – Bankruptcy Does Not Mean No Payment To Creditors [print this page] Debt Relief Services Bankruptcy Does Not Mean No Payment To Creditors
When burdened with huge debts it is natural for a common debtor to start panicking. In this situation he or she may start contemplating bankruptcy as an easy way out from debts. However bankruptcy is not the panacea for debt problems although it may seem so. Nowadays it is almost impossible to file for chapter 13 bankruptcy. Hence the option left to you will be the chapter 7 bankruptcy. Under this code all the non exempt property owned by you will be handed over to a bankruptcy attorney who will then liquidate it and pay off most of your loans. Mortgages and car loans will have to be repaid separately. If you are unable to repay these then the assets will be forfeited. You will be left with no assets to your name. Hence the notion that a bankruptcy will save you from having to repay the creditors is a false one.
At the same time a bankruptcy has a very adverse effect on a person's credit records. A bankruptcy remains on the credit records for 10 years and on the public record forever. If you have a bankruptcy on your record, it will be impossible to get credit anywhere in the market. Getting utility services and necessities like insurance will also be difficult and more expensive. A bankruptcy has an adverse effect on your chances of finding good employment options. In fact if you have a bankruptcy on your record, you will find it difficult to get a decent place to live. Moreover a bankruptcy destroys you socially. This is the reason that a bankruptcy is best avoided.
In fact if you are burdened with heavy debt, you can opt for debt settlement. Under this procedure you can approach your creditors and request them to reduce the loan amount payable. If negotiated well the settlement amount can be as less as half the original amount payable. This amount can then be paid off as a lump sum which will make you debt free immediately. After this you can concentrate on rebuilding your credit scores. Even if you decide to pay off the settlement amount in instalments, it will take a maximum of 48 months.
