When people are struggling with personal debt that has ballooned out of control, they often experience a great deal of stress and are sometimes unsure of what to do next. In Salem, New Hampshire, and across America, people who are experiencing these financial challenges firsthand should carefully review the benefits of different debt relief options before making any decisions. By successfully implementing a debt relief strategy, such as filing for bankruptcy, people can finally get a fresh start.
According to the Federal Trade Commission, people who are struggling with debt and unable to set up payment plans with creditors or credit counseling services to repay their debt may consider filing for bankruptcy. With regard to personal bankruptcy, many people opt for Chapter 13 or Chapter 7, but it is vital to understand how these two options differ. For example, some people are able to retain assets under Chapter 13 that are often lost under Chapter 7, such as cars and homes. With Chapter 13 bankruptcies, courts okay repayment plans (between three to five years) and debts are discharged once all payments are made. With Chapter 7, non-exempt assets are sold to repay creditors.
While Chapter 13 may work out well for some people, it is important to understand that not everyone is eligible. The United States Courts covers eligibility requirements for filing for Chapter 13 bankruptcy and outlines various conditions. For example, corporations cannot file for Chapter 13 and individuals who have more than $383,175 worth of unsecured debt or over $1,149,525 worth of secured debt are also not eligible. Furthermore, people need to have received credit counseling from an approved agency within the past six months before filing a bankruptcy petition.
