South Carolina residents struggling with debt may have considered bankruptcy. While it can be a good decision for many people, it is not without some drawbacks. Bankruptcy can help families wipe their financial slates clean and offer the opportunity to better manage their finances in the future.
However, it will also impact credit scores and may affect one's ability to receive credit in the short run. Those who choose to file for bankruptcy should know that it is a survivable process, and when it is over many feel like they are financially stronger than before.
In the United States, most individuals either file Chapter 7 or Chapter 13 bankruptcy. Chapter 7 is for people whose obligations make it unfeasible to use a repayment plan to take care of their debt. The majority of their assets are liquidated to repay their creditors. This type of bankruptcy is faster than the other but also makes a bigger impact on credit scores.
Chapter 13 is normally more for people with more assets such as a vehicle or home. They may be allowed to keep their assets and a modified repayment plan is offered for the court's approval. People who file Chapter 13 normally have continual income and want to hold onto their assets. This type of bankruptcy can last several years until everything is paid off under the supervision of the court.
Filing for bankruptcy in South Carolina is never an easy choice and is often a last resort for people who can no longer manage their debt. Regardless of the type of bankruptcy filed, both can help people begin to rebuild their credit and better manage their finances. While bankruptcy is not for everyone, it can help those who feel crushed under an overwhelming debt load by stopping creditor harassment and offering a path to a new beginning.
Source: San Francisco Chronicle, "How to Survive Bankruptcy," Angie Mohr, May 9, 2012