It doesn't take long to get in over your head financially. If you carry a balance on your credit cards, finance your vehicles and have a mortgage, those payments likely consume a significant portion of your pay every month. Getting into a car accident, suddenly falling ill or losing your job could mean going from making ends meet to drowning in debt.
How stressed are people in Louisiana? Very, according to a recent report. And it appears financial stress is a major contributor to this.
There are many chapters of bankruptcy, which can lead to a lot of confusion about filing. For the sake of personal bankruptcy filings, there are really only two chapters that are common and relevant for most people: Chapter 7 bankruptcy and Chapter 13 bankruptcy. Most people will end up filing the former rather than the latter, and this is mostly due to the fact that these two chapters have different income requirements.
Imagine that you are in debt to the point that you are keenly aware that your creditors are calling you and mailing you. As a result, you avoid the phone when it rings and you plop your mail down on a table that conveniently stays out of your sight. For lack of a better phrase, you bury your head in the sand about your debt.
One of the commonly understood aspects about student debt is that it can't be discharged through bankruptcy -- unless there are extreme circumstances involved. As such, this form of debt becomes incredibly important to manage for those who have a student loan. But let's say despite your best efforts, you simply can't keep up with your student loans and the debt starts to overwhelm you. What are you supposed to do without the ability to discharge it through bankruptcy?
According to a report from an insolvency practice in Canada, there is a serious stigma that Canadians have with bankruptcy, to the point that most respondents were willing to do nearly anything instead of filing for bankruptcy. More than 2,000 Canadians were surveyed for this information, and many responded to the survey by saying they would rather work 10 hours of overtime per week for a year, or give up their cell phone for a year, or even sell their organs than seek professional help in the form of a bankruptcy.
Typically when people think about debt that overwhelms an individual, they think about credit card debt or a mortgage that is too much for the person to handle. Student debt is another common reason for someone to suffer serious debt, but of course that is a non-dischargeable debt that causes complications during bankruptcy proceedings.
When people get into serious trouble with their finances and the debt piles up, many will eventually turn to a bankruptcy filing. This is a huge step in anyone's life,, and it can lead to many of their debts being discharged (through Chapter 7) or reorganized into a much more manageable repayment plan (Chapter 13). However, in either case, there are certain debts that people carry that can't be discharged through the bankruptcy process.
We've written a bunch of posts over the last couple of months about the bankruptcy process and how there are some simple, effective steps you can take to progress through the filing. It is an intimidating process -- we can't deny that. Bankruptcy has a stigma and people will feel that on some level, even if they know that the filing will help them in the long run.
Over the last month, we have talked a lot about bankruptcy filings and why you shouldn't be afraid of the process. There are many steps you need to take in order to properly get through your current financial picture, but it can be successfully done. One of the most important things you can do when you are considering bankruptcy is get legal counsel. Bankruptcy is complicated, and doing it on your own is not advised.