Debt is one undesirable asset that most of us would have earned during the course of life at different stages.
The wheel of life has its own twists and turns and would throw unexpected surprises before us that too at the most unexpected of times.
There are lots of people who find themselves crushed under the heavy burden of debts and find that all the way that leads them out are shut. This pathetic scenario may result due to various factors like sudden illness, unemployment or over exceeding your spending limit.
For all problems there ought to be a solution, similarly to get out of debts there is a lot of options and debt relief programs offered by various credit counselors and agencies dealing with these types of debt relief services.
Careful scrutiny has to be done while selecting such service providers and even more care has to be exercised while trying to resolve all these issues ourselves.
There is a lot of ads regarding debt relief programs going rounds, but most of the time it is disguised as bankruptcy filing services. Nevertheless bankruptcy also proves as a relief from financial problems, his should be last step to be taken to get relieved, since this might adversely impact your credit reports for the next 10 years.
However these services often come with a cost attached for the service they render.
If you do not get a solution to your debt problem even after trying out all possible options, then the last step would be to go in for filing a bankruptcy. Bankruptcy basically comes with two options, Chapter 13 and Chapter 7, which has to be legally filed in the federal bankruptcy court.
If you are a person having a stable and steady income, then Chapter 13 gives you the benefit to retain your property, such as a mortgaged house or car, which you might have lost. The court recommends and approves a repayment plan that will allows you pay off your debts during with your future incomes during the time span of three-to-five-year, instead of you surrendering any property. You might very well receive a discharge from your debts after completion of the payments under the specified repayment plan.
The time limit or the waiting period, for going in for a second filing under The Chapter 13 is far reduced to mere 2 years after receiving discharge from the first filing.
Chapter 7 is also known as the straight bankruptcy. Generally chapter 7 includes the selling of all assets that are not discharged/Exempt. Exempt property may be anything, which are not yet discharged from lien and includes property such as cars, professional instruments, and basic domestic furnishings. These properties might be sold or auctioned by an official appointed and authorized by the court or a trustee. At times these properties might also be handed over to your creditors.
The time limit or the waiting period, for going in for a second filing under The Chapter 7 is a whooping eight years after receiving a discharge in Chapter 7.
The ultimate aim of both Chapter 13 and Chapter 7 of bankruptcy is get you relieved from major financial crunch and to get you rid of all possible types of debts. They also facilitateexemptions that permit you to retain particular assets; however the exemption amounts might vary from state to state.
If you have filed for personal bankruptcy, then you will not be exempted from child support, alimony, penalties and fines, taxes, and some student loan commitments. You should also be clear about the fact that unless and until you have a satisfactory and stable strategy to get discharged off your debts under Chapter 13, you will not be given the advantage of retaining certain properties that are exempt.
The U.S. Trustee program is the organization affiliated to the U.S. Department of Justice that deals with cases relating to bankruptcy. This is the organization, which publishes a state-wise list of government-approved organizations to provide credit counseling.
If you have decided to hire a professional to deal with your financial crisis, then you are left with several professional debt-relief options to guide and help you lower or even totally make you debt-free in a steady and reasonable approach.
These professional services usually come with a price attached due to the fact that they are going to deal with real complex and delicate issues. It is also sure to comprise of a lot of documentary works that might sound Greek and Latin to us.
With little or no knowledge about the financial jargons and legal procedures, most of the debtors seek help from such financial professionals for various services.
Professional Debt Relief Programs comprises of various measures that are followed according to the level of financial struggle and scale of indebtedness of the individual.
Debt Settlement is also known as debt negotiation or debt resolution. Debt settlement as the name conveys, settles your debt to your creditors and make you discharged of your liens. Either you or a debt settlement company does this by finalizing a lump-sum settlement to your creditors and to get yourself relieved from your debts once for all.
Debt consolidation is the process of taking out a new loan, which is then used to consolidate and pay off all your previous debts. This consolidation process lowers the amount of interest you pay each month and makes it more easy and reasonable to manage your debts.
A Debt Management Program deals with all your unsecured debts, which comprises of your credit card bills, medical bills, student loansand unsecured lines of credit.
The main motive of this DMP is to minimize your monthly payments by getting an excuse to pay your interest rates, late fees or penalties from your creditors, which might bring down your total outstanding drastically. They also facilitate a repayment schedule to repay the full principal over a certain period of time.
Credit Counseling is a service that provides you with counseling about your financial aspects after carefully investigating your incomes and debts. It formulates an effective debt relief program that helps you to get discharged from your debts.
Also it becomes mandatory to receive the services from government approved Credit Counseling Service before filing for bankruptcy.
This is the last option to go in for to get rid of your financial crisis. This can be done through filing Chapter 13 or Chapter 7 under the federal bankruptcy court. This actually gives you a fresh lease of debt-free life.
As we have seen all the types of professional help provided by various companies, there are also individuals who think that these tasks can be done on their own. They also feel incurring extra costs by hiring professionals cannot be handled at this juncture of financial crunch.
The various ways by which you can perform some debt-relief measures by yourself are:
With all these and many more options provided to you to get you out of your financial crisis and help you lead you a debt-free life, it is up to you to choose the most suitable option that will suit you the best.
Always have in mind managing finances at an early stage will prevent you from falling into such traps. Formulate and lead your life in a financially healthy way. Also remember to keep filing bankruptcy your last option to get rid of your debts.