You Have the Choice to Take Back Control of Your Financial Future.

Options to address your growing debts

| Sep 17, 2020 | Chapter 7 Bankruptcy

Dealing with debt is stressful. During these unprecedented times, debt can quickly become overwhelming and cause residents in Florida and elsewhere to get lost in their debt. With incomes impacted and the cost of necessities increasing, one may be questioning how they will get through the rest of the year even if they budget. Thus, it may be time to take a good look at the situation, helping a debtor fully understand what debt relief options might be available to them.

Debt relief opportunities

When trying to manage debt, an important first step to take is to assess where the debt is coming from. Is it credit card debt? Medical debt? Mortgage? Payday loan? Once the source or sources of the debt are acknowledged, next, one should consider ways of reducing or managing the debt. This requires working with either creditors or debt collectors to negotiate a settlement. This could help one reduce the amount owed and result in a workable payment plan. This can give one a realistic outlook on the future of the debt and when it will be paid off.

Credit counseling is also an option. However, it is important to note that this is not suitable for all types of debts. Additionally, it comes with a fee and is likely a beneficial option for those with modest debt who are seeking to reduce their interest rate. While it does not reduce the amount owed, it could make the debt more manageable.

Filing for Chapter 7 bankruptcy

When other debt relief options are not suitable or did not work, it may be time to consider a bankruptcy filing. Filing for bankruptcy, especially a Chapter 7 bankruptcy, can assist a debtor by discharging certain debts. This type of bankruptcy can help eliminate most unsecured debts by liquidating one’s assets. While there are some exemptions, such as necessary clothing, furnishings, appliances and other good, one may be faced with a loss of a home or vehicle. Actions could be taken to secure these items.

A Chapter 7 bankruptcy is not available to everyone, as there is a threshold when it comes to income. Thus, if one seeks to file this type of bankruptcy, he or she must take  means test to qualify.

Navigating the bankruptcy process is not easy. It can spark many emotions and struggles, as one experiences various changes they were not prepared for. Nonetheless, regaining control of one’s finances or obtaining a fresh financial start is ideal. Thus, it is important to understand how the bankruptcy process can provide benefits that may be valuable to you.