e In today's economy, many Americans are filing for chapter 7 bankruptcy. The purpose of filing bankruptcy is to rebuild your credit but, before you proceed with this decision, you have to talk to your attorney and ask questions about the pros and cons. If you cannot handle the cons, then you try to find another method of rebuilding your finances. The biggest perk of taking this initiative step is that you can eliminate most or all of your debts.
Below is a list of debts that can be removed:
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Secured debt
This kind of debt is attached to your prized possessions, like car payments and mortgage payments. When your home is being sold for debt payments, the creditors have to be paid first. Here is a list of 3 secured debts that are eligible for elimination:
Mortgage
If you want this debt to be erased, there's a possibility that you will have to face foreclosure. When you remove your mortgage payment, you're basically giving the mortgage company or the bank back your home.
Past due rent
Going through bankruptcy can protect you from getting evicted for only a short amount of time. The court has a choice to make the landlord let you stay in your rental home if you're struggling to pay your rent. Unfortunately, you may still get evicted from your home even when you don't have to make previous rent payments.
Auto loan payments
Auto loans are secured debts that can get repossessed if you can no longer make your payments. If you file for chapter 7 bankruptcy, your car can have an exemption claim, but only if the model is older and its worth less than $10,000. A newer and pricier model will get sent back to the car company.
No secured debt
The difference between no secured and secured debt is that this debt doesn't have anything to do with your items. The most talked about unsecured debt is credit card debt. You need to report your balance as a debt when you take this step. Gratefully, you can get this debt removed without any major complications.
The only downfall is that your credit card will get canceled when the charge is disputed. Credit card companies will let you keep your credit card after bankruptcy if you agree to make a full payment. You do not have to inform the company that you're filing bankruptcy if you don't owe any money on the card, but watch out because the company can find out about this and decide to cancel the card.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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