There are several ways to find debt relief in the United States, each with varying effectiveness and cost. Debt relief programs may seem like attractive options, but in the long term, they always cost more than filing for bankruptcy, don’t relieve the stress of debt and are far worse for your overall credit profile/rating than a bankruptcy filing. A creditor will sometimes try and persuade you to do a “settlement” on a debt. The term “settlement” is a gross misnomer and a half-truth. While the creditor may allow you to pay less than the full amount of a debt, the creditor will sell the right to collect the remaining amount that you don’t pay to a third-party debt purchaser for 10 or 20 cents on the dollar. The third-party debt purchaser will then start collection actions against you on that remaining balance. Sometimes, you can try and work things out with your creditors through a so-called “debt settlement” company. However, “debt settlement” companies are rife with fraud. By far, the best way to quickly and permanently resolve debts is through the bankruptcy process. While many people are fearful of filing bankruptcy, the truth is that bankruptcy helps thousands of households find their way to financial balance and peace of mind each year. Behm Law Group Ltd. attorneys can protect and guide you through your case and help you understand the many misconceptions about filing bankruptcy in New Ulm, MN.
Avoiding bankruptcy mills and accepting the advice and support of a skilled bankruptcy attorney can help you find permanent relief from various kinds of debts. With bankruptcy, you can resolve debts related to credit cards, medical bills, foreclosed mortgages, car loans, personal loans, some tax debts, personal business expenses and debts, past due utility bills, overdraft lines of credit attached to your checking and savings accounts and many other types of debt.
The ideas behind the risks of bankruptcy are often inflated by third-party “debt settlement” providers, creditors and other self-interested, for-profit and credit-industry sponsored/financed parties who want you to be fearful of bankruptcy and who will profit from you choosing their questionable services over a permanent, court-enforced process. You will receive timely, expeditious, positive and permanent results by filing a bankruptcy case. You’ll find the following prevalent myths to be false.
- “Filers lose all their property.” This is faulty thinking about Chapter 7 liquidation bankruptcy as Chapter 7 liquidates your non-exempt assets in exchange for the permanent discharge of your debts. While it’s true that some people can lose some property in a Chapter 7 case, it is not a common occurrence. In the vast majority of Chapter 7 bankruptcy cases, all people lose are their debts. Generally speaking, you’ll be able to protect all your assets (like your home and car) with the allotted bankruptcy exemptions which are quite generous.
- “Married spouses have to file together.” While married couples can file jointly, it’s not a requirement for them to do so. One spouse can file as an individual and have that case handled like the bankruptcy case of any other unmarried filer. With debts that are in both spouses’ names, however, the filing of a joint bankruptcy case is necessary for those debts to be completely handled and discharged.
- “Your credit will never recover.” This is a falsehood about bankruptcy that is exaggerated. Yes, your credit will take a hit, but it’s typically only around 200 points. Additionally, that drop can quickly be recovered. Many filers who spend frugally and practically after a bankruptcy end up seeing a jump in their credit scores to “good” ranges (650 – 720) within just six to eight months after the conclusion of a bankruptcy case. Plus, bankruptcy usually completely falls off your credit profile after five to six years.
One other common myth is that bankruptcy filers are not financially responsible. The reality is that people can find themselves in debt for myriad reasons which are completely beyond their control. (Learn about more bankruptcy myths here.)