The average American family owes $8,377 according to CNBC. The average credit card debt has risen 6% in the last year, and debt rates are set to rival those of the Great Recession. With the amount of debt present in the average family—it’s no doubt that many people are filing for bankruptcy. You are not alone, and there is no shame in it. Unfortunately, bankruptcy is a scary term and considered taboo to discuss by many. That is why were are here today to offer you some helpful tips to survive this process.
If possible, consult a lawyer before filing.
There are a few different ways to file for bankruptcy, so you want to ensure you choose the method that is best for your situation.However, we realize that may be beyond your means right now.
What type of bankruptcy do I file for?
Two of the most common types of bankruptcy are Chapter 7 and Chapter 13.
One of the most common categories of bankruptcy filed for is Chapter 7 bankruptcy. This type of bankruptcy liquidates your assets in order to pay off as much of your debt as possible. Your bankruptcy will stay on your credit report for ten years. This offers a fresh start. However, if you own property or a company, and you are unwilling to part with it, this may not be your best option.
Chapter 13 bankruptcy may be a better option if you own property. This category of bankruptcy allows the filer to pay off their debts over 3-5 years. Any debts remaining after that “grace period” is over are discharged.
So What’s Next?
After Bankruptcy (Or During Chapter 13 Bankruptcy)
Bankruptcy can be scary—but it can also be a fresh start. If possible, remember to consult an attorney. Good luck!