Consolidating debt without bankruptcy

In Chapter 13, the court approves a repayment plan that allows you to use your future income to pay off your debts during a three-to-five-year period, rather than surrender any property.

After you have made all the payments under the plan, you receive a discharge of your debts.

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Some of your property may be sold by a court-appointed official — a trustee — or turned over to your creditors.

The new bankruptcy laws have changed the time period during which you can receive a discharge through Chapter 7.

You now must wait eight years after receiving a discharge in Chapter 7 before you can file again under that chapter.

While the ads pitch the promise of debt relief, they rarely say relief may be spelled b-a-n-k-r-u-p-t-c-y.

In your effort to get solvent, be on the alert for advertisements that offer seemingly quick fixes.

Whether your debt dilemma is the result of an illness, unemployment, or simply overspending, it can seem overwhelming.And although bankruptcy is one option to deal with financial problems, it’s generally considered the option of last resort.The reason: its long-term negative impact on your creditworthiness. The consequences of bankruptcy are significant and require careful consideration.Bankruptcy information (both the date of your filing and the later date of discharge) stays on your credit report for 10 years, and can hinder your ability to get credit, a job, insurance, or even a place to live. By using the protection and assistance provided by federal law. ” You’ll find out later that such phrases often involve filing for bankruptcy relief, which can hurt your credit and cost you attorneys’ fees. Other factors to think about: Effective October 2005, Congress made sweeping changes to the bankruptcy laws.The Federal Trade Commission (FTC) cautions consumers to read between the lines when faced with ads in newspapers, magazines, or even telephone directories that say: “Consolidate your bills into one monthly payment without borrowing.” “STOP credit harassment, foreclosures, repossessions, tax levies, and garnishments.” “Keep Your Property.” “Wipe out your debts! If you’re having trouble paying your bills, consider these possibilities before considering filing for bankruptcy: If none of these options is possible, bankruptcy may be the likely alternative. The net effect of these changes is to give consumers more incentive to seek bankruptcy relief under Chapter 13 rather than Chapter 7.There are two primary types of personal bankruptcy: Chapter 13 and Chapter 7. Chapter 13 allows you, if you have a steady income, to keep property, such as a mortgaged house or car, that you might otherwise lose.