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Cincinnati Bankruptcy Legal Blog

$40.3 billion of credit-card debt was paid off during early 2018

During the first three months of 2018, Americans paid off more than $40.3 billion worth of credit-card debt according to WalletHub researchers. While this may sound like good news, Americans accumulated $91.6 billion in new debit on their credit cards just last year alone.

The amount of new credit-card debt accumulated by Americans during 2017 is the highest it's been since 2007. Outstanding balances have only been as high as they currently are once before since 2008. Americans' existing revolving debt currently stands at $1.021 trillion.

Are there disadvantages of Chapter 13 bankruptcy?

Despite all the benefits of Chapter 13 bankruptcy, such as the ability to start fresh with your finances, there are some potential disadvantages to become familiar with before pushing forward.

Here are some things to keep in mind:

  • A Chapter 13 bankruptcy requires you to use a repayment plan to pay some or all of your debts. This can last as long as five years, meaning that your bankruptcy will linger for quite some time.
  • You don't get to keep all your disposable income. Unlike with Chapter 7, your disposable income goes toward repaying your debts.
  • It will ruin your credit. Generally speaking, a Chapter 13 bankruptcy will remain on your credit report for seven years. This can make it a challenge to receive any type of loan, such as to purchase a car or home.
  • You are not permitted to keep your credit cards. While this may sound like a bad thing, it can actually help keep you out of financial trouble in the future.
  • You can't file for Chapter 7 in the near future. If you file for Chapter 13 bankruptcy, you are not permitted to file for Chapter 7 until a period of six years goes by.

Facing financial problems due to one or more of these issues?

When is the last time you reviewed the Ohio economy and considered its current state in relation to your own finances? If that question made you shrug your shoulders and say that you don't recall ever doing such a thing, you are likely not the only one. Many people live from day-to-day without considering how various external factors may impact their financial situations.

When things get out of hand financially, successfully overcoming the problem may hinge upon understanding what caused the problem. Several factors often lead to serious financial crises. The good news is that, in most situations there are debt relief options available to help you wipe the slate clean and devise a new plan for restored financial stability. If figuring out which options are best feels a little out of your league, you can seek experienced guidance to help you determine a best course of action.

5 steps to get back on your financial feet after bankruptcy

Although there are many benefits of filing for bankruptcy, you can't overlook the fact that this will change your life in a number of ways.

For example, a bankruptcy will remain on your credit report for a minimum of seven years. This can make it difficult to secure a loan during this time period.

You can do these things to negotiate medical bills

If you come to find yourself swimming in medical debt, you shouldn't hesitate to learn more about the steps you can take to find relief.

Many people assume that they have to pay their medical bills in full. They don't understand that they can negotiate, all with the idea of saving money along the way.

Have you thought about these drawbacks of Chapter 7 bankruptcy?

Despite the many benefits of Chapter 7 bankruptcy, you don't want to push forward until you're familiar with both the pros and cons.

If you've yet to consider the drawbacks of Chapter 7 bankruptcy, it's best to learn more before you take action. Neglecting to do so could lead to disappointment in the future, and that's not something you need with so much already on your plate.

Debt settlement may not be the best option for you

As you consider the best ways to manage your outstanding debt, you may have certain options that you have ranked above others. While you still may feel hesitant about seeking any type of debt relief, you may be at the point where you know that your remaining liabilities will only continue to get worse if you do not take serious action.

While you certainly should explore the various relief options available, you may want to ensure that you gain the right information regarding each avenue. For instance, if you are considering debt settlement, it may benefit you to understand that this option does not suit everyone's needs.

What are the top reasons to file for Chapter 7 bankruptcy?

From a financial perspective, you hope you never have to learn more about Chapter 7 bankruptcy. If you find yourself in this position, there's a good chance you're bogged down with debt and have yet to find a way out.

At some point, don't be surprised if you realize that filing for Chapter 7 bankruptcy will help you reach your goals sooner rather than later. Here are some of the best reasons to consider this option:

  • Start over at the beginning: After you file for Chapter 7 bankruptcy and your debts are discharged, you're in position to start fresh. With a clean slate, it's much easier to create the future you've been dreaming of.
  • Keep your future income: You don't have to use any of your future income to repay creditors, as is the case with Chapter 13 bankruptcy.
  • It's a fast process: Although a Chapter 7 bankruptcy filing may feel like it's dragging on, you can typically receive a discharge within 60 to 90 days. After this happens, you're starting fresh and making decisions to better your life in the future.

What are the consumer benefits of Chapter 13?

The most common form of bankruptcy available to consumers is Chapter 7, which allows those who struggle with their debt to give up their personal property and submit to some financial restrictions in return for financial relief from debts they cannot pay. However, some individuals have the means to pay their debts off over time, but still need structure to help get back on track financially and protection from aggressive collection tactics.

Those who do have sufficient income to pay their debts may qualify for a Chapter 13 repayment plan, which may be preferable to a standard Chapter 7 liquidation of assets. Under Chapter 13, debtors must submit to financial restrictions against accruing more debt for a period of time and will see their credit score suffer, but they may not need to forfeit their property. The repayment plan lasts between three and five years.

Is Chapter 7 bankruptcy your best debt relief option?

Juggling finances can be tricky at best and overwhelmingly stressful if your money train derails. That said, you'd be hard-pressed to find anyone in Ohio or the nation, for that matter, who hasn't experienced financial struggles at some point in life. The most critical issue is how aware of your options you are when financial problems hit and also how much you know about debt relief in order to choose the path that helps you move past crisis and restore financial stability.

Perhaps you've already determined that your most viable option is bankruptcy. You're now faced with the challenge of figuring out which type of bankruptcy best fits your needs. As a homeowner filing as an individual, you may want to consider Chapter 7, especially if your mortgage lender is threatening foreclosure. As with all debt relief programs, you must satisfy all eligibility requirements before submitting a Chapter 7 petition in court.