Most people have debt. In fact, about 772,000 Americans feel overwhelmed by debt. Whether it is limited to a mortgage and car payment or extends to multiple credit cards, personal and student loans, and medical debt, owing money can be a burden. One rule of thumb for determining if one has too much debt is when the amount a person owes is close to his or her yearly income. When the burden is distressing, many in Columbia, South Carolina, consider bankruptcy as a way to find relief.
The benefit of bankruptcy is that it immediately stops all debt collection. Creditors may no longer call or contact a debtor for payment. The most common form of bankruptcy is Chapter 7, or liquidation bankruptcy. In Chapter 7, the court appoints a trustee to liquidate the debtor’s assets and distribute them to the creditors. This liquidation is often the stumbling block for many who may be in need of bankruptcy relief; however, the trustee should ensure that a person in bankruptcy does not lose what is needed to live and work.
Some resist bankruptcy because they fear how it will affect their credit scores. Often, their credit scores are already damaged by delinquencies and non-payment. Bankruptcy may allow one to rebuild credit more quickly than by continuing to struggle with the debt. Chapter 7 will put a negative mark on one’s credit report, but this is not permanent, and it does not mean one will never be able to get credit in the future.
Going through bankruptcy can be a stressful time. The uncertainty alone may be distressing. However, an attorney who understands the bankruptcy laws in Columbia, South Carolina, will be able to advise someone who seeks this relief and defend his or her assets as much as possible.
Source: mensfitness.com, “5 reasons filing for bankruptcy could save you from life-crushing debt”, Damon Trent, April 24, 2017