If you are overburdened with debt and you can unable to pay your creditors, contact an experienced Tooele Utah bankruptcy lawyer. The lawyer can review you circumstances and explain your options. There are other ways to deal with debts. However, they may not be suitable for all. The perfect option for you will depend on your circumstances. Sometimes it may be a better option to file for bankruptcy.
Debt consolidation is one of the most popular alternatives to bankruptcy when it comes to reducing personal debt in America. However, it is not without its own balance of benefits and drawbacks. Weighing these can help a person decide whether this avenue would be a good fit for their situation. Oftentimes, consumers find that bankruptcy may be a better option. If you are considering debt consolidation as an alternative to bankruptcy, speak to an experienced Tooele Utah bankruptcy lawyer.
First and foremost, it’s important to know that debt consolidation involves taking out a loan to pay down the rest of your outstanding debts. These loans are easier to get than other types of loans and are exclusively to be used for this purpose. However, the fact that it is a loan at all can be a deterrent or an intimidating factor for some people already struggling with mountains of debt. Never assume a debt consolidation to be an automatic and viable alternative to bankruptcy filing. Sometimes a bankruptcy filing may be a better option.
Here are a few other important facts to consider when thinking about debt consolidation:
• Debt consolidation creates a single, monthly payment, rather than multiple payments to multiple creditors that consumers may currently be facing.
• These single payments may be significantly lower than the sum of payments they are currently paying – or they may be roughly the same.
• To get a lower interest rate and lower monthly payments, you will typically have to “secure” your loan.
• Securing the loan involves putting up collateral, which may include property or other valuables.
• If you fail to complete payments in a timely manner, you may risk losing these valuables.
• Consolidation also does not protect the consumer from default lawsuits, which can leave them vulnerable during their debt relief efforts.
Perhaps one of the largest drawbacks of choosing debt consolidation over bankruptcy or other methods is that it loses its appeal very quickly.
While heavy marketing and media popularity make it seem very appealing at the start, consumers often find that strict payment schedules and long, arduous journeys to a debt-free state make this method more difficult to navigate than they originally anticipated.
As the risks can become very high with this type of debt relief, it is important to weigh this option carefully under the advice of an experienced Tooele Utah bankruptcy lawyer.
For those who aren’t interested in the idea of taking on new debt or taking out a new loan, debt management programs or debt settlement can be solid choices. Here’s what you need to know about these approaches to debt relief:
• Debt management programs are set up and run by credit counselors.
• They work with your creditors to reduce your payments and may even be able to lessen the amount of debt you have overall.
• Even if your overall debt cannot be reduced, your interest rates, late fees, and other associated expenses often are dramatically reduced or completely eliminated with this approach.
• This method does report on your credit ratings, as does any other debt relief program. However, it is removed as soon as you finish the program, whereas bankruptcy and other options will remain on your record for years to come even after you have paid down all debt.
• Debt management payment schedules are exceedingly strict; a single missed payment can result in termination from the program and requirement to repay fees and other associated cost.
• Debt settlement companies may promise to reduce your overall debt by over 50%.
• The process can take three to four years or more, depending on a variety of factors.
• There is no promise of effectiveness.
• Credit card companies do not have to work with these agencies and there is little recourse for consumers if they choose not to.
As you’re exploring your options, you may notice that bankruptcy is regarded as a more dramatic option than most others.
Why is this?
As you’ll learn, it has a lot to do with what happens during bankruptcy – and afterward. There are also many misconceptions about bankruptcy, which can be put to rest by speaking with an experienced bankruptcy attorney.
Some important facts to know about bankruptcy include:
• Bankruptcy does not wipe out all of your debt instantly.
• It does freeze your debt, though, meaning creditors can no longer contact you about it. This is called an automatic stay.
• How much of your debt is released by filing for bankruptcy depends on which type of bankruptcy you file for.
• The type of bankruptcy you file will also depend on whether you are filing as an individual, business, etc.
• This doesn’t mean your debt won’t be repaid; the point of your bankruptcy is to negotiate a plan to address your debt, not to simply abandon it.
• Chapter 7 bankruptcy involves liquidation of assets in order to pay off as much of your debt as possible.
• The rest of your debts may be negotiated down or released, depending on your situation.
• Chapter 13 bankruptcy involves paying down your renegotiated debt over the course of three-five years and typically does not involve liquidation.
• Both chapter 7 and chapter 13 are used for personal bankruptcy and may or may not involve exemptions when it comes to property, valuables, income, etc.
• Chapter 11 bankruptcy is typically reserved for businesses and is very similar to chapter 13.
• A business may choose to carry on everyday operations as normal during these bankruptcies, or may have to downsize significantly or even close due to the situation.
Bankruptcy payments boast an advantage over those of consolidation or other debt relief methods in that they are typically easier to meet financially. This is because they are customized based on what is actually available to a person from their income and assets, so they are more likely to continue making payment successfully during bankruptcy than during a consolidation.
One thing many people do not know about bankruptcy is that you can begin repairing and rebuilding your credit right away during a bankruptcy.
Other options – such as consolidation – do not allow you to work on your credit during the debt relief process. This means that you’re stuck handling one step of the process at a time, making it much longer than it may advertised to you as. While it may take multiple years for a bankruptcy to be worked through, you’re doing just that – working throughout the length of it – to rebuild your financial life as you go.
It’s important to remember that while paying down debt is a practical process and should be regarded as such, it can also be a very emotional journey for many people.
When you’re looking to pay down debt, it’s usually in preparation for a major change in your life or to move on from something that has caused damage in the past.
When emotion is involved, it’s easier to make irrational decisions, so taking your time and following the advice of an experienced Tooele Utah bankruptcy lawyer throughout your debt free journey is critical for achieving success.
To keep the balance of practical accomplishment and emotions in check during your debt-free journey, consider prioritizing your debt pay-down to give the most gratifying results, rather than simply the most practical.
What does this mean?
Here are a few examples:
• If you have two $500 debts to pay down or a single $1000 debts to pay down, you may choose to pay down the two $500 debts first in order to feel more accomplished emotionally.
• While debts with higher interest rates should typically be paid down first, debts in smaller amounts can be paid down quickly and give consumers a feeling of accomplishment right away, keeping them motivated to continue their journey.
These types of changes to your debt pay-down plan should only be made with the advice of your financial professional, of course.
However, working together with your experienced Tooele Utah bankruptcy lawyer will give you the chance to voice your own opinions and concerns and do what feels most motivating for you.
At the end of the day, whatever is getting you to that endpoint in your debt-free journey is the best choice.
Knowing your options along the way will simply help you make the smartest choices throughout the path to get there.
Bankruptcy is a legal process intended to give honest debtors a fresh financial start by discharging their debts. When a debtor files for bankruptcy an automatic stay comes into operation preventing creditors from contacting the debtor or taking steps to collect the debt. If the creditor has initiated legal proceedings to recover the debt, the legal proceedings will be automatically stayed when the debtor files for bankruptcy. Consult with an experienced Tooele Utah bankruptcy lawyer if you want to file for bankruptcy.
To be eligible, your unsecured and secured debts must be less than certain dollar amount. This dollar amount is adjusted each year by law. If you want to file for bankruptcy protection under Chapter 13 of the bankruptcy code, consult with an experienced bankruptcy attorney. The attorney can advise you on your eligibility for filing under Chapter 13. If you have a source of income, you should consider filing under Chapter 13 whereas if you do not have a source of income, you should file for bankruptcy protection under Chapter 7.
In a Chapter 7 bankruptcy proceeding, a court appointed trustee will take over the individual’s assets and sell the assets to pay off the creditors. However, the trustee will not take over all the assets of the individual. Federal and state laws provide certain exemptions. Assets that are exempt under Federal and state laws continue to remain in possession of the individual. After all the non-exempt assets are sold by the trustee, the individual will receive a discharge. Chapter 7 bankruptcy is also called liquidation proceedings. If you wish to retain your assets, speak to an experienced Tooele Utah bankruptcy lawyer. The lawyer will advise you on the best course of action. You may not automatically qualify for a Chapter 13 bankruptcy proceedings in Utah.
The Bankruptcy Code has a provision for lien stripping. Liens can be stripped off of the debtor’s assets in when there is not enough equity in the asset, after deducting senior liens from the property’s current market value, to secure the unsecured in whole or in part, where the lien exceeds the value of the debtor’s property.
Lien stripping means reducing a secured claim to the value of the underlying collateral. The lien is bifurcated into secured and unsecured. If you want to use bankruptcy to strip a lien, contact an experienced Tooele Utah bankruptcy lawyer. You can legally strip a lien in bankruptcy. The secured lien is allowed in the amount up to the fair market value of the property at the time of the stripping. The balance of the lien, which exceeds the fair market value of the property, is now deemed unsecured. Speak to an experienced Tooele Utah bankruptcy lawyer to know how you can strip liens in bankruptcy.
Utah Bankruptcy is complex. Seek an appointment with an experienced Tooele Utah bankruptcy lawyer. An experienced Tooele Utah bankruptcy lawyer can explain your options. You may have other options available. Consider these options. If these options are unworkable for you, then bankruptcy may be your only option.
Don’t try to navigate the complex maze of Utah bankruptcy laws by yourself. Always hire an experienced Tooele Utah bankruptcy lawyer. In an attempt to save attorney fees, you may end up getting your bankruptcy petition thrown out without any of your debts getting discharged. An experienced Tooele Utah bankruptcy lawyer is your best friend when you are filing for bankruptcy protection.
Bankruptcy Attorney Free Consultation
When you need to stop a garnishment, stop a foreclosure, stop a repossession of a car, protect your wages, protect your assets, protect your home and your family, please call Ascent Law LLC (801) 676-5506 for your Free Consultation. We can help you. We file chapter 7 bankruptcy, chapter 13 bankruptcy, chapter 9 bankruptcy, chapter 11 bankruptcy and chapter 12 bankruptcies for those who need relief.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506