Many different circumstances can cause someone to experience overwhelming debt. Excess credit card or personal loan payments become insurmountable after a loss of employment or a change in family status. Whether the debt came from uncontrolled gambling or an unexpected divorce, residents of Jackson, Mississippi, may choose bankruptcy as the ultimate debt relief option. Although federal bankruptcy laws are complex, they can be broken down into manageable steps.
Bankruptcy and your credit report
The truth about how bankruptcy impacts credit scores may be good news to individuals who are undecided about the process. Within 7 to 10 years after filing Chapter 7 bankruptcy, the public record is wiped away from the consumer credit report. Loans and secured credit card offers are likely to be made available within a short time after the debt is discharged.
Maintaining assets during bankruptcy
One common myth surrounding bankruptcy is that you must forfeit all your tangible assets when you file. While this is not true, consumers should also not expect to keep all their assets when filing bankruptcy. Usually, individuals and families are able to maintain their primary residence and at least one vehicle. If a bankruptcy trustee is assigned, he or she will help determine which assets, if any, must be forfeited.
Filing bankruptcy ruins your reputation
Another myth about bankruptcy is that it forever ruins your financial character. Filing for debt relief options does not mean that a person does not want to pay his or her bills or that he or she is simply an irresponsible spender. Good, hardworking people can find themselves in a terrible financial bind. Bankruptcy may be the solution to navigating these financial challenges.
Understanding the basic requirements and allowances of a bankruptcy filing helps individuals make the right decision based on their unique circumstances. Many times, the benefits outweigh the liabilities of dealing with the heavy burden of debts.