There are quite a few bankruptcy options available. You could choose one that suits your need. The important thing is to have a thorough understanding of each option so you can pick one that will work best for you.

Chapter 7 bankruptcy option:

Chapter 7 bankruptcy option is usually the last one pursued by consumers. It wipes clean all the debt but also takes away all the assets with the secured debt. However the good thing is that when you have filed for Chapter 7 bankruptcy, the creditors will have to stay away and they cannot ask for any payments. The bill collectors are unable to take any sort of action against the consumer. Yet some of your possessions may have to be sold off to clear off the existing debt.

Chapter 7 bankruptcy option is not available in every state. Also, not every person is allowed to file for this option. First you have to undergo a means test. It is an income based test. It will determine whether your income is feasible enough to file for any other bankruptcy options. Still if your income does not cover the payments over a period of five years, then you can go ahead and file for Chapter 7 bankruptcy.

Chapter 9 bankruptcy option:

The Chapter 9 bankruptcy option is rarely used by the average consumers. It is used in the cases where huge debts have been run up but there are no necessary assets to sell and pay off the debt. Municipalities make use of this bankruptcy option. Some common users of this option are businesses based on agriculture and professional fishing companies. Read the full story

Nowadays there are many people who are  carrying around credit card debt and it feels as if you are bearing the weight of the whole world. So please act upon this advice: Never avoid your credit card debt.

By avoiding, I merely means completely forgetting it as if it doesn’t exist. People do this actually. They stop making payments, hide from the companies and do whatever they could to get away from debt. And don’t think of filing bankruptcy, until things go beyond your control.

Ignoring debt make situation more worse

Talking about credit cards, I must tell you that by ignoring your debt you are doing nothing but making your situation much worse. So, here I have mentioned 6 reasons why you you should not ignore your card debt.

1. Your phone will never stop ringing

The least thing that could possibly happen to you is that your phone will never stop ringing. They will trace you out, where ever you go, and the debt collections people will prompt you at work, home, school, etc.

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Many people get far behind on their credit card payments, but manage to pay off the balances before they get charged off as bad debt. Howsoever, they still don’t find their credit score rising although they have paid off their creditors.

It is a fact that credit scores require a lot of patience. It takes quite some time to move them in either direction, but they are more likely to sink faster than they rise. And although it may take a long time to get your credit score in the right place, you should pay off your delinquent accounts as soon as possible.

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