debt solution like sold and the proceeds are
bankruptcy should really distributed amongst the
only be used as a last creditors.
possible solution. The problem
with this solution of debt There are two types of this
problems is that it includes a solution of your debt problems:
lot more than simply eliminating
debt. When someone declares them Chapter 7
self bankrupted, all debt
collection actions against that which states that a person is
person are prevented. The court required to hand over much of
grants an "automatic stay", which their property, but creditors
- with a few exceptions means cannot seek damages from further
that creditors cannot come after income.
the money owed to them.
Chapter 13
The most important exception is
that when a loan is secured by allows a person to keep most of
property creditors can seek their income, but have to make a
relief from the stay and seize plan to pay the debt back to
that property. The other creditors based on their future
exceptions are student loan debt, income. Under this plan, the
alimony, child support and taxes. court can require individuals to
live within a very strict budget.
The backside for the person who
seeks this solution to eliminate As you see, there are downsides
his debt is that he or she must to both debt elimination plans.
hand over all non-exempt One of the biggest downside is
property. This property is then that both debt erase plans will
significantly impact a person's debt solutions like debt
credit rate. For this reason, negotiation, debt counselling and
declaring yourself bankrupt is a debt consolidation should
solution of your debt problems definitely be considered first.
that should be evaluated very
thoroughly and carefully. Other
About the Author:
Terje Brooks Ellingsen is a writer and internet publisher. He runs the website http://www.1st-in-loan.net Terje gives advice and helps people with personal financial issues like how to get out of debt, see http://www.1st-in-loan.net/debt_help.htm and to apply online for credit cards, see http://www.1st-in-loan.net/credit_card_offer.htm
Source: www.isnare.com
