Entering our second decade of filing Chapter 7 and Chapter 13 bankruptcies, we continue to help clients get a fresh start, free from crushing medical bills and credit card debt. Misconceptions still exist based on new laws passed several years ago. You may think that bankruptcy is no longer an option. Not true. Our job is to give you hope and prepare you for a future free of money problems.
Things will turn around soon; one more bonus and the bills will be caught up. A better job is just around the corner. One or more of these statements will run through the South Carolina debtor's head as he or she considers what should be done to relieve the financial pressure. Rather than continue to worry and wonder how to pay off the debt, it may be time to take action and file for bankruptcy.
Research indicates that the longer an individual puts off filing for bankruptcy, the harder it will be for him or her to get a fresh start. Many choose to take a wait and see approach -- let's wait and see what happens next month, next summer, after the first of the year, etc. However, as he or she waits to see what will happen, debts continue to increase, the stress continues to build and assets are often depleted.
Once assets are utilized to pay debts, they are no longer available to assist the individual is getting back on track financially. When the debt problem is primarily unsecured debt, the use of assets to pay these debts may not be the best option. The individual will still need assets once the debt has been discharged to be able to get the sought after fresh start.
Bankruptcy is designed to allow the individual to have a second chance financially. For many South Carolina residents who are struggling with debt, addressing the problem now rather than later is the way to go. Experienced legal counsel can assist the individual is determining if bankruptcy is in his or her best interest.
Home ownership is often asserted to be the "American dream." Many South Carolina residents look forward to purchasing their dream home; however, when financial struggles become reality, they worry that they will never be able to qualify for a mortgage. This simply is not true. In fact, many who file bankruptcy find that they are able to obtain a new mortgage within a few short years.
One benefit of bankruptcy is that it allows the individual to start over and rebuild his or her credit. Then, within just a couple of years, the individual will be eligible to apply for a mortgage. FHA and VA require a two year waiting period once the bankruptcy has been discharged; USDA requires three years. Additionally, conventional FNMA or FMAC loans typically require a four year waiting period.
During the waiting period, the individual has the opportunity to begin rebuilding his or her credit. In addition to adhering to the repayment plan, if one was generated as a part of the bankruptcy, he or she will want to be sure to make timely payments on all accounts. Additionally, through the use of a secured credit account, the individual can show that he or she does know how to manage debt. This will also add points to the individual's credit score.
Bankruptcy will remain on the individual's credit report for seven to 10 years, depending upon the type of bankruptcy. However, this does not mean that home ownership is unattainable. In many cases, bankruptcy offers the South Carolina resident the opportunity to start over financially and then attain his or her "American dream" of home ownership.
Financial struggles are a concern for many South Carolina residents. For some, the loss of income, a medical crisis or some other catastrophe has left them unable to pay their bills. For others, there is income; however, it is not enough to keep up with everything that they owe each month. When this happens, filing for bankruptcy may be the appropriate solution.
For those who have minimal income or are unable to make payments on their mounting debt, Chapter 7 bankruptcy may be the appropriate choice. Under Chapter 7 bankruptcy, the majority -- and sometimes all -- of the individual's debt can be discharged. Assets that are not considered to be exempt may be sold to help offset this debt; however, the individual is typically able to retain the majority of his or her assets that are not used as collateral of a debt being discharged.
For those who are able to make payments but need to restructure their financial situation to make it more manageable, Chapter 13 bankruptcy may be the appropriate choice. Under Chapter 13 bankruptcy, a three or five year repayment plan is presented to the court for approval. At the end of this time period, remaining unsecured debt may be discharged. The benefit of this option is that the individual is able to continue making payments at a more manageable level and retain desired assets.
When a South Carolina resident finds him or herself facing financial struggles, there are options available. Many have found that bankruptcy provides the needed relief while allowing the individual to start over and rebuild his or her financial future. An experienced attorney can help one determine the best way to address his or her financial dilemma.
When considering either global, South Carolina or personal economics, you may notice that finances fluctuate. A nation, civic community or individual may go from days of financial stability, perhaps even a thriving economy to major financial crisis in a short amount of time. Depending on your circumstances, you may be aware of an approaching financial crisis or caught completely off-guard.
Perhaps your boss tells you the company plans on cutting back and you'll be out of a job in six months. If you are unable to secure new employment within that time, it may come as no surprise when you start to have trouble making ends meet once you're unemployed. On the other hand, you may have a few months' savings in the bank but face sudden, unexpected crisis when a medical emergency arises. When external factors cause financial distress, it's critical that you know where to seek support.
Life issues that prompt financial crises
On the bright side, there are often one or more options available to resolve such problems. Your key to success may lie in the type of resources you access when a financial crisis hits. You may relate to one or more of these issues that often cause serious financial problems:
Were you unable to pay back your college loans before you earned your degree? If so, you are no different than thousands of other South Carolina residents facing similar student loan-related financial problems.
If you are in the middle of divorce proceedings or recently finalized a divorce, you likely understand how financially-draining the process can be. It's true that money problems often lead to divorce. It's also true that divorce often prompts major financial problems.
When temporary issues arise that challenge your ability to make ends meet, how do you handle it? If you resort to paying bills with a credit card, you may be one of many who have fallen into a financial crisis by using credit as cash.
An income reduction may have been the straw that broke your financial camel's back. Perhaps you still have a job but your employer recently did away with bonuses, which may have been enough to throw your whole financial portfolio out of whack.
The more you know about possible forms of debt relief, the better. By making informed decisions and taking advantage of financial support options available, you may be able to get your head back above water and lay the groundwork for a stronger financial future.
A sudden job loss or health concern can quickly alter one's financial picture. One day the South Carolina family is living comfortably in their home, bills are being paid and there is even money left over to enjoy the occasional splurge. The next day, tragedy strikes and the family's financial situation immediately changes. When this happens, the family may be faced with foreclosure unless they can find a way to restructure their financial obligations to allow for the home to be saved.
One of the first steps the family will want to take is to analyze their budget. Based upon the changing circumstances, what income can the family expect to receive? Additionally, which expenses must be paid? Which expenses can be eliminated? Once this has been accomplished, the family will have a good idea of where they stand financially.
After this has been accomplished, a number of decisions may need to be made. It may be possible to increase income by taking on an extra job. Or, it may be possible to reduce expenses; some lenders may be open to this option. After these options have been exhausted, there still may be more that needs to go out than is coming in.
In a situation such as this one, filing for bankruptcy may be in the South Carolina family's best interest. Even if the family decides that bankruptcy is the appropriate choice, it may be possible to prevent a foreclosure. As long as there is enough income to cover the mortgage payment and other necessary living expenses, it may be possible to reaffirm the mortgage and exclude it from bankruptcy proceedings. Experienced legal counsel can assist the family in determining what they should do.
Financial crises are usually temporary; that's the good news. More good news is that there are often several debt relief options available that can help you get things back on track when situations arise that threaten your financial stability. You may be understandably frightened if lenders are mentioning words like foreclosure or creditors are threatening litigation.
It's always best to try to remain calm and gather as much information as possible to help you make financial decisions that resolve the problem at hand and set the tone for a stronger financial future. If you're considering filing for bankruptcy, timing is important because when you file may affect which of your debts you can discharge. You may also be relieved to know that you don't have to go it alone when trying to find viable solutions to serious financial problems because support is available.
First things first
Before you can file for bankruptcy, you must determine if you are eligible. Since there are different types of bankruptcy, you'll want to review all options and seek counsel as to which course of action may be best in your particular situation. You may possibly qualify for one type of bankruptcy but not another. For instance, if you earn a certain amount of income, you can file for Chapter 13 but not Chapter 7.
Types of debts you can discharge
There is no exact answer to this question because various issues and circumstances may affect your situation; however, there are certain debts that are usually dischargeable through bankruptcy. These would include credit card debts, medical bills and personal loans. There also debts that are not dischargeable, such as child support or court-ordered compensation you must pay as a result of causing injury to someone in a car accident. Make sure you understand which debts you can discharge and which you can't in order to avoid complications.
Overcoming negative stigma
When you think of filing for bankruptcy, you may feel embarrassed or worried about what your friends and extended family members will think. The fact is that many South Carolinians choose this form of debt relief, which often allows people to keep their homes, start fresh and rebuild financial stability. No two situations are the same, so it pays to explore all options and make confident, informed decisions that can move you toward a debt-free future.
According to the financial world, the American consumer is doing well. Unemployment is down, consumer spending is up and credit is readily available. While this may be good news to some South Carolina residents, it can also be a concern for others. Some residents are discovering that they are drowning in credit card debt and auto loans with no apparent way out.
Research indicates that consumer debt will reach as high as $4 trillion this year. This is great news for retail stores and car dealerships; however, it can easily become a problem for the lender if the economy starts to slip. However, for the consumer, it can become a problem much earlier. This same research also shows that defaults on credit card debt and auto loans are also rising.
The average South Carolina resident has found debt fairly easy to acquire in recent years. This has made that new outfit too tempting to pass up and home makeover appealing. These bills are generally small by themselves. However, when added to a mortgage, auto loans, student loans and other regular monthly bills, credit card debt can quickly get out of control.
Some South Carolina residents are successful in getting the situation under control and reducing their debt on their own. Others, however, discover that this is simply not possible given their current income and expense picture. When this happens, it is time to take action and take a look at possible alternatives to sinking deeper in debt. Bankruptcy may be the appropriate choice; experienced legal counsel can assist in reviewing available options.
For many Americans, debt is simply an unavoidable fact of life. But what happens when debt piles up to the point where it is out of control? For many people facing this issue in South Carolina, personal bankruptcy is an option that may make sense. The most common of these individual bankruptcy types are Chapter 7 and Chapter 13 bankruptcy.
Chapter 13 bankruptcy is more of a repayment assistance system, wherein the filer has some discretionary income and can pay down some debts. Those filing for Chapter 7 bankruptcy, meanwhile, are in a much more challenging situation. In these cases, a trustee is appointed and can sell nonexempt assets such as a car or house at will to creditors. Typically, these assets must be of little worth and have no equity for Chapter 7 bankruptcy to be utilized.
Who files for Chapter 7 bankruptcy? Typically filers have no or little income and cannot pay off debts with their cash flow or by liquidating assets themselves. This move will naturally hit a credit score hard, usually knocking it down about 200 points. Chapter 7 bankruptcy will remain on a filer's credit report for 10 years.
Despite this hit, filers can rebuild their score by demonstrating solvency and making good financial decisions. This can include bringing in more money by getting a new or better job, budgeting and paying off any bills that do come in such as car payments or rent. Individuals in South Carolina considering Chapter 7 bankruptcy as an option should work with a bankruptcy lawyer to understand their options.
Are you worried what your extended family or close friends will think if you file for bankruptcy? Many South Carolina residents agree that the negative stigma attached to filing for debt relief causes some people to avoid their most viable options for regaining financial stability down the line. If you're able to set your worries aside, you may find that support is available, and often only a phone call away.
As with most major life-changing decisions, there may be benefits and downsides to choosing bankruptcy to help you overcome a financial crisis. Once you know more about the potential pros and cons, you can weigh the balance and determine if seeking this form of debt relief is in your best interest. It also helps to talk to others who have successfully navigated the bankruptcy process in the past.
It might be easier to explain bankruptcy to a future lender than to have to share information about defaulted loans, major credit card debt and other bad financial memories. Bankruptcy can prevent aggressive creditor action against you. Filing for immediate debt relief through bankruptcy essentially gives you a whole new financial lease on life. You may be able to retain ownership of your largest assets, such as your home or car because such assets are often exempt from bankruptcy.
While you may be able to keep some of your assets, you may lose others. To request bankruptcy, you have to explain your financial crisis to the court. Certain debts are non-dischargable, such as tax debt or child support. Bankruptcy remains on your credit report for a handful of years. The bottom line is that you may be able to bounce back following serious financial problems if you gain the right information and tap into available assistance to help you set the tone for a financially strong future.
Factors to consider
Before determining which type of bankruptcy best fits your needs and financial goals, you may want to think about various factors, such as what types of issues led to your crisis. Was it medical bills, loss of employment or sudden income change? Maybe you just got into the habit of spending more than you make. It's also wise to remember that bankruptcy will impact your credit score.
Who can help?
You may have a close family member or colleague who has gone through similar circumstances. He or she may have sage advice regarding ways about getting your finances back on track. When someone shares what worked in his or her situation, it may spark an idea as to how you can rectify your own. Many South Carolina residents seek outside support by discussing their financial problems with experienced debt relief attorneys.
Credit scores play a large part in the financial decisions that a South Carolina resident makes. Anytime one applies for a loan, the credit scores are checked. In fact, the majority of the time when one even applies for a new apartment or a new job, his or her credit score is checked. As a result, some individuals fear that a bankruptcy will have such a dramatic affect upon their credit score that they do nothing rather than take the necessary steps to get out of financial trouble.
The simple fact is that once the individual has reached the point where bankruptcy is a viable option, his or her credit score is already low. At this point, the individual is having trouble making payments and is probably delinquent in making payments. The credit score has already suffered as a result of these financial troubles.
Ignoring the problem will not make it go away. However, there are steps that the South Carolina resident can take to begin to repair the financial damage and have a fresh financial start. One option is through filing for Chapter 13 bankruptcy. Under Chapter 13, a repayment plan is established that allows the individual to repay debt over a three to five-year period. At the end of this time period, remaining debt that is not excluded from the bankruptcy can be discharged.
While filing for Chapter 13 bankruptcy will most likely have a negative effect upon the South Carolina resident's credit score, it does open the door to repairing the problem and beginning the repair process. The individual can begin to rebuild the score by making affordable debt payments. An experienced attorney can help the individual determine if Chapter 13 is the appropriate choice.