In the US, bankruptcy provides an effective way to settle debts and prevent further financial hardships for consumers. The claims help consumers with an automatic stay that protects them against lawsuits. However, other options are available to help consumers eliminate debts without using the courts. Reviewing what consumers can achieve with debt elimination processes helps them figure out what step to take next.
Are Settlement Offers More Suitable Than Bankruptcy?
In some instances, a settlement offer helps consumers pay off debts without filing for bankruptcy. The consumer gets a discount on the total outstanding balance. For some, the discount is 50% of the total balance. If the attorney negotiates settlement offers for most debts, the consumer avoids bankruptcy.
How are Consumers Eligible for Bankruptcy?
The eligibility requirements are either a high than average income level or an adequate volume of assets. For chapter 13, the consumer provides financial records that show an income greater than the median for their household size. For chapter 7, the consumer shows titles and deeds for assets that are appraised for a value that is greater than their overall debt balance.
What Stipulations Apply to Bankruptcy?
Chapter 13 imposes strict stipulations. It restricts the consumer from starting a new line credit and requires them to use disposable income to pay off additional debts. The consumer who chooses chapter 7 doesn’t have any control over what assets are sold to settle debts. Each chapter requires the consumer to complete the entire process before debts are discharged.
How Do Consumers Choose the Most Appropriate Chapter?
Eligibility requirements determine what chapter is most appropriate for most consumers. However, consumers who meet the requirements for both chapters can choose for themselves. The attorney reviews what chapter manages the consumer’s debts and helps them become debt-free most effectively.
In the US, bankruptcy offers an effective choice for consumers with excessive debt. The chapters available to consumers provide them with repayment plans and liquidation. The stipulations of the chapters impose restrictions for consumers that they must follow. Consumers who want to learn more about how to settle debts are encouraged to contact a Debt reduction attorney right now.