Dealing with Bankruptcy

When you have absolutely no other options, then a bankruptcy may well be the best way to go if you find yourself being totally overwhelmed with debt and see no other way to go forward. The main question that will be faced is which type to file for? With credit over $200,000 in unsecured and $800,000 in secured debt you may file under Chapter 11, while with debt ratios below those numbers you may file under Chapter 13, which is similar, that allows you to repay the debt over a period of time (usually 5 years) to re-gain your debt free status. For others, the only resolution may be a Chapter 7 filing, which essentially does away with any outstanding debt, but that would take into account (and take, literally) any assets or equity you may have, beit in a home or car or other property in order to pay the debts.

Any of those forms of bankruptcy will clear the debts from your calendar, but you wont be able to get around the fact that you have filed for a Chapter for quite a few years to come. However, those rules are changing, and right now its possible to gain credit when you have had problems of this magnitude in the past. For example, if your debt has being discharged for more than 2 years, you are now eligible to apply for a home loan, without that factoid having any detrimental effect on your credit report. The same applies to home repossessions themselves just 2 years out from a home repossession and you can apply for a new home loan.

While it may not seem like an ideal solution, filing a bankruptcy isnt the end of the world with regards credit as it used to be, if only 4 or 5 short years ago. The simple fact is that too many people nowadays are finding themselves in positions that reflect bad management in the past, whereas 3 short years ago, banks asked for 5 or 7 years without a bankruptcy.

So while it may be an extreme answer to your money problems, there really is light at the end of the tunnel for those of us that may find themselves in the predicament that has only bankruptcy as the answer. So bite the bullet and go ahead and file if you must, in 2 short years youll be fully able to recover and buy that new house.