Tuesday, November 8, 2016
What Is The Best Way To Pay My Debts Off?
If you have more debt than you have income, you are probably struggling every month to make all of your payments. If that is the case, it is also likely that you have been contacted by your creditors, asking for payment. When a lender asks for payment and you cannot make it, the next step is usually to turn you over to a collection agency or file a lawsuit to collect the debt or take back the property that secured the loan. None of the possibilities typically end well for the debtor, and a good approach for you to take if this is your situation is to find a way to pay your debts. There are a lot of options out there for debt repayment; including refinancing, asking for a lower payment that is easier to make, selling assets to pay off loans, cutting back on luxury expenses, or trying to consolidate all of your debt into one larger loan and only make on payment per month. There is also the option of bankruptcy.
With bankruptcy you are allowed to eliminate debt, and in some cases you can do this without having to continue to make payments. Some of the benefits of bankruptcy include:
• The instant you file you are protected by the automatic stay, which is a legal mechanism that makes it impermissible for your lenders to contact you and ask for payment. This gives you a break from collection activities, including collection lawsuits, and for most people this break allows them to clear their head and come up with a plan to get out of debt.
• Depending on the type of case you file, you might be able to wipe out unsecured debt all together. Unsecured debt is that debt which is taken out without putting up a piece of property as collateral for repayment of the debt. Common forms of unsecured debt are credit cards and medical bills.
• If you are not able to eliminate all of your unsecured debt in full, you might be able to pay less than the current balance that is due. This feature of a Chapter 13 case is helpful to many because the unsecured debt is reduced to an amount that is a small fraction of the entire amount due.
• You can pay the value of an item, such as your car, rather than the full balance. This allows you to pay off an auto loan quickly and while under the protection of the bankruptcy laws. The possibility of being able to pay only what your car is worth rather than what is due is also a feature of a Chapter 13 case, and is attractive to a lot of car owners.
Once your bankruptcy case is over, you will receive what is called the discharge. The discharge is the legal notation that your debts are no longer due. Creditors cannot ask you to pay a discharged debt, and if they do they are in violation of the discharge order and can be held accountable for any damages you suffer as a result of their asking you to pay. For help determining if bankruptcy is the right tool for you to use to get out of debt, call us now.
For more information about how to handle overly burdensome debt, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.