Making Minimum Payments$117,50540+ Years
Credit Counseling$68,40060 months
Consolidation Loan$52,18160 months
Debt Resolution$27,44842 months
The Last Resort
We list bankruptcy last because it should be considered as a last resort to your financial difficulties. If you are in such a dire financial situation that you are unable to make any payments to your creditors, you may wish to consult a bankruptcy attorney to review your options. However, new laws have been passed that make it harder to qualify for bankruptcy. Also, you should consider the fact that while negative payment information that is reported to a credit reporting agency by your credit card companies and other creditors stays on your credit report for 7 years, the reporting of a bankruptcy can last up to 10 years in many cases, making it difficult if not impossible to get credit or finance a home or vehicle during this period of time.
there are several types of debts that you CANNOT discharge through bankruptcy
- Alimony payments
- Child support payments
- Debts that you have incurred after Bankruptcy is filed
- Some debts that you incurred in the preceding six months of filing Bankruptcy
- Any loans that were obtained in a fradulent manner
- Debts resulting in personal injury if you were driving under the influence of drugs or alcohol
- Debts from intentional and malicious injuries to another person or property
- Certain types of student loans
- Certain types of taxes
Some types of bankruptcies require a liquidation of your assets in order to discharge your debts. Other types allow for a restructuring of your debts subject to a court approved debt repayment plan. Either way, in order to qualify for bankruptcy, you will be required to demonstrate to the bankruptcy court through a "means test" that you cannot pay your current debts, and in certain types of bankruptcies, where you are trying to reorganize, that you also have some ability to repay your debts. You will also likely be required to undergo credit counseling and budgeting education courses as a requirement of discharging your debts through bankruptcy. The emotional and social stigma surrounding bankruptcy is challenging for years after your debts are discharged, and therefore, bankruptcy should be considered only after all other options have been exhausted.
We list bankruptcy last because it should be considered as a last resort to your financial difficulties. If your financial situation is such that you cannot make your current minimum payments, you may want to consider bankruptcy as an option and meet with a bankruptcy attorney to see if this is a suitable option for you.
Recently, new bankruptcy laws were passed that make it harder to qualify for bankruptcy. Also, while negative payment information (reported to a credit reporting agency by your credit card companies and other creditors) stays on your credit report for 7 years, the reporting of a Bankruptcy can last up to 10 years in many cases, making it difficult if not impossible to get credit, or finance a home or vehicle, during this period of time.
In the United States, there are six forms of Bankruptcy available to married couples, individuals, and businesses. For the purpose of this discussion, we will focus on the three most common forms used by married couples, individuals, and small business: Chapter 7, Chapter 13, and Chapter 11.