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Louisville Bankruptcy Blog

The risks that come with debt consolidation

Those who are struggling with multiple debts can find it difficult to meet their repayment obligations. Multiple debts can mean that debtors need to make debt repayments on different days of the month, and they will likely also be subject to different interest rates.

This is why many debtors turn to debt consolidation as a solution to their debt management issues. Debt consolidation is the process of combining different debts into one and ideally lowering the overall amount of owed interest. While debt consolidation can help many people to make progress in repaying their debts, there are some risks involved. If you are considering going through debt consolidation, you should bear the following in mind.

Managing your repayment plan in Chapter 13 bankruptcy

If you have recently filed for Chapter 13 bankruptcy or if you are considering filing, you should be proactive when it comes to understanding the terms of the bankruptcy chapter. Unlike Chapter 7 bankruptcy, which primarily involves the liquidation of assets, Chapter 13 bankruptcy is concerned with reorganizing your debts so that it becomes manageable to repay them over time.

Therefore, understanding the repayment plan in detail its paramount to being successful in your bankruptcy in the long haul. You should have a good comprehension of the process for modifying the schedule, as well as know the negative consequences of missing scheduled repayments. The following are some tips for making your repayment plan work for you.

Is it possible to be happy during bankruptcy?

Taking the decision to file for bankruptcy is a big step. For many, taking such an action means that the debtor feels that their debts are too overwhelming to tackle alone. Debts can be a huge source of stress, particularly when creditors are being persistent in their collection efforts. By taking action to file for bankruptcy, debtors can halt foreclosure actions and make a start on repaying debts, either through a repayment plan or by liquidating assets.

However, many prospective bankruptcy filers worry that bankruptcy will lead to months or years of misery because they will need to commit their lives to repaying back their debts, rather than enjoying modest luxuries.

How does a secured credit card work?

Most credit cards are unsecured loans. They are not backed up by anything. The lender is placing their faith in you that you will repay the money they give you, perhaps because you have shown a history of faithful payments in the past.

However, you do have the option to get a secured credit card. Wondering how this works? It's very similar, but you have collateral in the form of a down payment. If you want a card with a $1,000 limit, for instance, you pay the $1,000 up front. The lender keeps that money and gives you the card.

Understanding the Chapter 13 bankruptcy filing process

If you are dealing with overwhelming debts, you have probably looked into all of the possible debt relief options available to you. Many debtors arrive at the conclusion that filing for bankruptcy is the best way to ensure a debt-free life in the long term. However, they are often confused about which chapter they should file for and what the process involves.

If you are considering filing for Chapter 13 bankruptcy, it is important that you look into what the process entails. Chapter 13 bankruptcy tends to require an investment of time in comparison to other chapters; however, this proves to be worthwhile for many.

Think twice before accepting these bankruptcy myths

Filing for bankruptcy is never something that people do willingly. It requires that debtors accept the financial trouble that they have found themselves in, and take radical action to work toward a debt-free life. While this is never an easy choice to make, it is often made harder by widely spread myths about bankruptcy.

When considering whether to file for bankruptcy, it is important to apply critical thinking to the situation and consider whether some of the things you have been told are really true. The following are some of the most commonly spread myths about the bankruptcy process.

New rules may give creditors more access to your life

Right now, there are limits on how often creditors can contact you to demand payment -- and by what methods. Legitimate debt collection companies know they have to abide by these limits and that there are stiff penalties for crossing them. They can even be sued by the debtors they're trying to collect from if they go too far over the line.

Well, under new rules proposed by the federal government, those lines may get a lot blurrier and the consequences a lot less imposing when it comes to what constitutes creditor harassment.

Key considerations before filing for Chapter 7 bankruptcy

If you are struggling with a high amount of debt, you may have already read about the potential benefits of filing for Chapter 7 bankruptcy. This bankruptcy filing can be particularly beneficial for those who have a low income and a high amount of debts.

However, every type of bankruptcy chapter comes with limitations. This is why it is important to consider every aspect of a bankruptcy chapter before making the decision to commit. The following are some key things to consider before filing for Chapter 7 bankruptcy.

How can a monthly payment plan be beneficial in bankruptcy?

It is very common for people to get into debt because they have challenges in the way that they manage their cash flow. Perhaps the complexity of your finances has meant that you are having trouble budgeting effectively and controlling your outgoings. These problems can make falling into debt very easy.

One of the ways that Chapter 13 bankruptcy can help debtors is by helping them to create a payment plan that, when followed, can successfully repay the debt that they owe over a period of time.

How can I cope emotionally with a bankruptcy?

Struggling financially not only affects your wallet, but it can have consequences for your mental health. Spending all of your emotional energy worrying about money can mean that you will be less emotionally available for your partner and children, or other loved ones.

If you are considering taking action to combat your debt by filing for bankruptcy, it is important to understand how this could affect your mental health. By being aware of the challenges of bankruptcy, you will be better equipped to take on the task.

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