WHEN debts become unmanageable, bankruptcy can become an invaluable financial relief to help you regain control of your finances. Without the “fresh start” that bankruptcy provides, it would be impossible for many people to pay back what they owe, and they will simply remain in debt with nowhere to go. If you’ve tried everything you can to pay your debts, but nothing has worked so far, it might be time to consider some legal options.
Debt problems can happen to anyone at any time. No one is exempt. Bankruptcy is a fact of life. Without it, people with serious debt problems will remain stuck where they are, unable to move on with their lives. Living with the stress every day caused by the burden of debt is a horrible way to live. Bankruptcy can offer hope when the future looks bleak. So, the whole concept of bankruptcy is about giving you a financial fresh start when you’ve done your best to find a way out of debt, but realize that nothing is working anymore. So instead of trying to “fix” the situation, you simply start with a clean slate.
Some people with limited income and resources will be eligible for Chapter 7 to completely erase their debts. Others may have no choice but to file Chapter 13 and pay their creditors over 3-5 years. Much depends on your income and assets. You should also consider your goal in seeking debt relief. Do you just need to clear your debts so you can start over, or do you just need to consolidate your bills into one more affordable monthly payment?
Under Chapter 7 bankruptcy eligibility rules, your current monthly income must be measured against the median monthly income of a family your size in your state. If your average monthly income is below the median, Chapter 7 may be right for you. If your income is above the median, Chapter 7 is still a possibility, but there’s an extra step. You must pass what is called a “means test”, a mathematical formula to calculate your disposable income and determine if it is high enough to help you pay off some of your debts. If the court finds that you are able to pay a certain portion of your debts through Chapter 13, the amount you can afford will be sufficient and you will not necessarily have to pay everything in full.
Chapter 13 may be the most effective way to consolidate all of your debt into one low monthly payment while paying 0% on your credit card and other unsecured debt. As I mentioned above, in many cases most debts are only paid a small percentage of the actual amount resulting in a significant reduction – a reduction of 50% or more is not unusual . So, for the purposes of this discussion, let’s say you owe a total of $50,000 in credit card debt, but can only afford to pay $400 per month. This amount may be acceptable and sufficient to satisfy all claims of creditors. Call my office and I’ll explain how this might be possible. Imagine what it will do for you if you can cut your debt repayments by more than half each month! Or better yet, if you qualify for Chapter 7, you may not have to make a payment at all! No more sleepless nights worrying about your bills. No more living paycheck to paycheck and wondering each month how you can afford to pay rent and keep the lights on until the next paycheck.
Instead of desperately trying to pay your debts and failing to make progress, you might be better off declaring bankruptcy now to start fresh and rebuild your credit sooner rather than later. If you need help getting out of debt, I’d love to help. Call my office at 1-866-477-7772 and let’s talk about how I can give you a fresh financial start through Chapter 7 or 13. Or if bankruptcy isn’t the best option for you, maybe I can- be help you negotiate settlements with your creditors.
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None of the information contained herein is intended to provide legal advice for any specific situation. Atti. Ray J. Bulaon has successfully helped over 6,000 clients get out of debt. For a free evaluation of your situation by an attorney, please call RJB Law Firms toll-free at 1-866-477-7772.