The phrase "filing for bankruptcy" can have a negative connotation. However, filing for bankruptcy can be the best option to help you solve your financial problems. There are three bankruptcy options. Chapter 7 is for people who don't have the ability to pay their existing debts. It is usually used when most of the debt is unsecured; it is the most popular type of bankruptcy. Chapter 11 if the debt exceeds the amount limited in a Chapter 13. If you don't qualify for a Chapter 7 bankruptcy, you have the option to file a Chapter 13. Chapter 13 is a complete reorganization of debts. It is designed for debtors that are behind on secured debts, such as, home mortgages and car loans. Do your research and find out how to file for bankruptcy in Memphis, or in your local area. Top Reasons to File for Bankruptcy • If you are behind on your mortgage payments, you may be facing foreclosure. If you file a Chapter 13 bankruptcy, it will help you re-structure your payment plan and help you get caught up on your mortgage. • Getting behind on your car payments gives your creditor the right to repossess your vehicle. They are even allowed to sell your car after a certain amount of time. Filing a Chapter 13 bankruptcy will prevent repossession, and can even help you get a car back that has been previously taken by your creditor. The terms of the bankruptcy will help you get caught up on payments. In some cases, the value of the car can be reassessed and payments based on the lower value. • If you owe back taxes to the IRS, bankruptcy can help eliminate the debt or freeze interest on the debt while you pay it back. • If you are over your head in credit card debt, filing bankruptcy can help you. Chapter 7 bankruptcy can supply complete relief of the debt, Chapter 13 can help lower your debt and set you up on a feasible payment plan. The amount of debt that will need to be repaid will be determined by your monthly budget. Most of the time, it will be interest-free. • Many people find themselves in a position to file bankruptcy due to unforeseen medical expenses. As a part of the bankruptcy, medical bills can be re-negotiated to make them possible to manage. In some cases, medical bills can be completely forgiven. • Another common cause for the need to consider bankruptcy is the loss of your employment. It doesn't take long to get behind with payments when you don't have an income. • If you are behind in paying your debts, you are probably being hounded by creditors. You may receive several calls or emails every day. Once you file bankruptcy, your creditors may not contact you. If they do, they may be dropped from your bankruptcy or they may even have to pay restitution to you. • One of the biggest concerns regarding filing bankruptcy is the negative effect it will have on your credit. You may not realize that any unpaid debt will create an impact on your credit score. A bankruptcy will show on your credit history for 7 to 10 years, but as soon as you file, you can start re-building your credit. If you make your newly restructured payments on time, you can help revive your credit score. Making the decision to file for bankruptcy can be a difficult one. Life can be filled with unexpected obstacles. If you seek professional advice on how to file for bankruptcy in Memphis, or consult a law firm in your area, you can see if bankruptcy is a viable option to help you get a fresh start.
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