When debt becomes a problem, it can be virtually impossible to come out of it on your own. The only way to truly resolve debt on your own is to receive a major windfall or land a job that can produce more money than what you are currently making. It can be difficult to resolve financial issues with the income situation not changing. That is unless there is a lot of unnecessary spending happening, but that will only take care of so much.
When you seek debt relief from your Minneapolis bankruptcy lawyer, you are presented with two options and those options are to opt into credit counseling or to file bankruptcy. The choice is yours. If you are like many people, you want to try credit counseling before bankruptcy. Both do have their benefits.
Credit counseling educates on debt management and also includes a program that gets debt under control. In this program, creditors are negotiated with. The creditor does have to cooperate in order to be included in the program. Those that do cooperate will normally reduce the balance, reduce the minimum payment, eliminate or reduce the interest, and/or stop accruing interest completely. This reduces the amount owed and allows all of the payments to be combined into one monthly payment that is easy to manage. The appropriate amounts will be distributed to each creditor.
There are a number of benefits. One of those is the creditor reporting the account as current. Once you have completed the program, which takes approximately 3 years, all accounts are reported as paid on time and this can have a very positive impact on your credit report. In the meantime, you are free of the debt. The downfall, however, is that a missed payment can void the settlement agreements and that can cause everything to go back to the way it was, including interest for the period you were taking part in the credit counseling program.
Consumers file two types of bankruptcy. They are Chapter 7 and Chapter 13. Despite the type that is filed, the harassing collections calls stop, wage garnishments stop, foreclosure cannot move forward, and car repossession cannot occur. Lawsuits stop also.
Chapter 7 is what individuals file to discharge all of their unsecure debts. Most individuals are able to keep all of their assets because their values do not exceed the exempt dollar amounts set at the state or federal levels.
When filing Chapter 13, you enter into a payment agreement that enables you to pay back all or part of the debt to your creditors over a 36-60 month period. The payment amount is one that you discuss with your bankruptcy lawyer so you can find an amount that you can afford that will be accepted by the court. This form of bankruptcy is ideal for those that have assets they could lose. Those that don’t meet the financial requirements for Chapter 7 also opt for Chapter 13.
When debt has you more than overwhelmed, it is time for you to do something about it. There are different forms of debt relief available to you aside from trying to take care of the problem yourself. Paul Ross & Associates can present you with the credit counseling option and the bankruptcy option so that the harassing collection calls can stop and so you can move forward financially. Call for your free consultation at 952-448-3333.