Getting into debt can be fairly easy, especially since not many people are able to buy everything they want. Credit card and loan companies target people who are in need of their services because of different financial problems. Because loans charge interest the longer they are active, it can sometimes be hard to pay off loans since the interest accumulates faster than you can pay it off. Being in debt is not uncommon, but it can sometimes become overwhelming and actually create stress and a very difficult life.
For those who have no other options, the option to file bankruptcy is available. This method should only be used as a last resort though, because it can have a dramatic effect on a credit score. Although it may seem like a quick fix, it can be very hard to fix your credit, which can create problems with buying cars, renting apartments, or even applying for credit cards. It is important that those who file bankruptcy have no other options, and need serious help to gain back their financial stability. One must qualify for bankruptcy, and can only file for it once every six years.
You can file bankruptcy to cover only certain debts, such as credit cards or loans. You may want to continue to pay certain loans that are not currently in jeopardy, such as a home loan or car loan. The bankruptcy lawyer would need to know about it ahead of time, since they would need to include it in your record. Also keep in mind though, that not all debts are included in bankruptcy. Alimony, student loans, or old child support will not be covered by bankruptcy, making it your responsibility. Bankrupts is primarily for those who are unable to pay their bills because of some type of unfortunate event, including illness, loss of job, medical bills, marital problems, or other large expenses that cannot be avoided. Bankruptcy is not for those who are addicted to shopping and charged up fifteen different credit cards, or those who just got approved for more credit than they can handle. Bankruptcy is not an easy way out of having to pay your bills; it is an option for those who are completely unable to pay their bills because of something tragic in their life.
When filing bankruptcy, one must go through a bankruptcy lawyer. About five days after the petition is filed, the trustee will send a notice out to all of the banks and loan companies that need to collect. Once someone is approved for bankruptcy, the court will mail out a notice that should be kept with all court and bankruptcy information. A court hearing is set, and an agreement is made between the court and the creditors. You would then be required to make a payment each month to cover some of the debt, and the payment will last for a couple of years. Those who file bankruptcy are able to reduce their debt, but are still required to make payments in order to improve their credit and pay back some of what they owe. Filing bankruptcy is pretty serious, and should only be considered when there are no other possible options for resolving debt.