Reed Law Firm, P.A. - bankruptcy

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Columbia South Carolina Bankruptcy Law Blog

Don’t let these bankruptcy myths keep you from filing

Are you considering filing for bankruptcy, but something is holding your back? Are you worried that there are consequences to bankruptcy that will end up hurting you more than helping? The good news is that your worries are probably based on old myths and hearsay that are most likely untrue. The fact is, bankruptcy can provide benefits that can soon lead you on the road to financial recovery.

Do not let these myths keep you from finding debt relief.

How to get your finances back on track after bankruptcy

When you initially filed for bankruptcy, you may have felt like you failed at life. Now that you are on the other side of your debt, you have probably realized that filing for bankruptcy can be a good thing. You have a fresh start, and a new opportunity to correct past financial mistakes.

Here is what you need to know about getting your finances back on track after filing for bankruptcy.

Bankruptcy in South Carolina

In a cultural sense, bankruptcy is often perceived as a financial tool used by businesses when they are struggling under the weight of debt. However, as some South Carolina residents are already aware, Chapter 7 bankruptcy is also a tool that can be used by individuals or families for whom debt has become an insurmountable issue. This is particularly true for older people, who may be laboring under debt that is years or decades old. Thankfully, Chapter 7 remains a helpful financial strategy in combating financial obligations that have become unmanageable.

In a Chapter 7 filing, the federal bankruptcy court in the filer's state will take an accounting of the accrued assets and debts of the filer. Some of these assets can be liquidated to pay down existing debt, while other assets are considered exempt from the bankruptcy process. Similarly, most and sometimes all debt can be discharged by the court. Common examples of this sort of debt include credit card debt and medical bills.

How bankruptcy works in South Carolina

Debt is one of the most crippling issues facing many American families today. Credit card debt is especially rampant, with consumer debt said to be in the billions of dollars per year. For this reason, many people both here in South Carolina and elsewhere in the nation turn to Chapter 7 bankruptcy to help them recover from insurmountable debt. However, it is important to understand the nature of bankruptcy before making such an important financial decision.

Bankruptcy is a complicated legal process through which a court assesses an individual's candidacy for filing, the listed assets and debts, and which of the debts can be discharged. Nonexempt debts are typically paid down through asset liquidation, which involves selling assets to satisfy the filer's debt. Credit card debt is considered unsecured and dischargeable.

South Carolina debt advice

For many Americans, debt is a stressful part of everyday life. Here in South Carolina and elsewhere in the nation, debt levels are on the rise, particularly when it comes to unsecured debts like credit card debt and medical debt. For some people, consolidation might be enough to handle debt, and for others, a Chapter 7 bankruptcy filing may be the more fiscally responsible bet.

It is important to understand the difference between the two. Debt consolidation essentially means rolling several different debts into one, in order for the debtor to be able to pay a single monthly payment instead of reporting to multiple creditors. Personal loans, home equity loans and balance transfer credit cards are all useful tools in consolidation. A consolidated loan typically also has a lower interest rate, allowing the debtor to pay down the outstanding amount more quickly.

Tips on cutting costs after bankruptcy

For those considering bankruptcy, you may be worried about the decision plummeting an already-suffering credit score into a hole you can't dig yourself out of. But bankruptcy is meant to help you get back on your feet and credit scores are subject to change.

Here are a few tips to help you budget efficiently to improve your credit score after bankruptcy.

Understanding Chapter 7 bankruptcy in South Carolina

A great deal of misinformation is often circulated when discussing the topic of bankruptcy. For many South Carolina residents, the idea of filing for Chapter 7 bankruptcy can be equated with all manner of negative decisions, but the reality is for many people, bankruptcy is the most sound financial option. In cases of significant debt, bankruptcy can provide the relief that allows individuals and families to recover from loss and get back on the right track.

Generally speaking, bankruptcy is a legal process wherein a federal court reviews debts and liabilities, as well as tracks assets in an effort to gain a clear picture of the overall financial situation. Once this assessment is complete, the court determines what amount of the assets can be liquidated to pay down creditors. The court also takes into consideration debts that can be discharged -- these are often referred to as "unsecured debts" and include medical and credit card debt.

Will filing for bankruptcy destroy my credit?

Many people mistakenly believe that filing for bankruptcy will permanently ruin their credit. This is not true. While your credit will take a hit after you file for bankruptcy, you may be surprised that the long-term impact on your credit is not as bad as you might think.

Any negative item on your credit report will diminish over time, including bankruptcy. However, your credit score will significantly lower after filing, and the terms for any loan you request will be less than favorable. However, it can take as little as two years to begin to see credit offers that reflect more normal terms. What happens to your credit following a bankruptcy is seen by many as the lesser of two evils, better than defaulting on loans or receiving constant calls from creditors.

Chapter 7 filings increasing in over 65 age group

Many South Carolina residents are nearing age 65 or have already celebrated that age-of-retirement birthday. While many older people have a lot in common, such as being grandparents or having certain health issues, there appears to be another area where many elders are experiencing similar situations. It has to do with finances and Chapter 7 bankruptcy.

In a perfect world, the rest of this post would be about how South Carolinians retire at age 65 then head off to fulfill their golden year dreams, like traveling, spending time on their hobbies or investing in beachfront properties where they can live out their days seek whatever pleasantries suit them. Since this is not a perfect world, the reality is often much different. In fact, the financial issue that many seniors reportedly have in common these days is bankruptcy.

Making purchases in Chapter 7 bankruptcy in South Carolina

There is a considerable amount of misinformation commonly attributed to bankruptcy. When an individual in South Carolina files for Chapter 7 bankruptcy, it can be unclear what financial allowances they are afforded during the process. While it may be possible to make larger purchases like a new vehicle during the filing, it may not be in the best interest of the individual to do so.

Chapter 7 is considered a "liquidation" bankruptcy, in which assets are tallied and then used to pay down creditors. This process generally takes up to half a year, and individuals who file are required by law to report all assets to the bankruptcy trustee. Some assets may be considered exempt from this process, including vehicles that are currently being financed, depending on the laws of the individual's state of residence.

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