Having excessive debt can do a lot of damage to your credit score, but for some, bankruptcy may actually be more helpful than harmful to their credit. There are many types of bankruptcies to help you get ahead of your debt and back on the road to recovery. At the Law Offices of Robert M. Kaplan, P.C. we can walk you through the bankruptcy process so you can get out from under years of debt.
- Chapter 7 – Chapter 7 bankruptcy is the best option for those with a lot of credit card, medical, or non-collateral debt. While some of your property may be seized to help pay off a portion of your debts most of your belongings will be exempt, such as your clothes and furniture. If you do have a lot of secured debt, such as car loans, then this type of bankruptcy may not be ideal for you.
- Chapter 13 – Chapter 13 bankruptcy will be beneficial to those with a lot of secured debt. This type of bankruptcy helps you to consolidate some of your debts and allows you to create a payment plan that will help you catch up on your debts over a three to five-year period, which means it is required to have a stable income in order to qualify. After those three to five years, you may not be responsible for the remainder of your debts. Filing Chapter 13 bankruptcy will also help you avoid the seizing of your assets and foreclosure.
How Bankruptcy Can Help You
One of the major downfalls of bankruptcy is that it lowers your credit score. Yet, most people who are considering bankruptcy already have a lower than average score, so it can help them start with a clean slate. By eliminating most of your debts, your credit will start to recover instead of continually dropping due to missed payments, delinquency, and having accounts in collection. People with higher credit scores will be more negatively impacted by bankruptcy since it will cause a bigger drop in their score than someone with an already low score.
Call Our Law Firm in Schaumburg
Trying to decide whether filing bankruptcy can help you, or which type will work best for your situation can be overwhelming. Especially when you are already in a stressful situation with the constant calls from creditors. If you live in the Schaumburg, IL area and would like more information about bankruptcy and how it can help you get back in control, please contact our office today!