If you have fallen on hard times in Harrisburg and are no longer capable of paying your credit card debts and other financial obligations, there is a good chance you are looking for a way out of your situation. You have tried every possible solution you could think of, including payday loans, cash advances, debt consolidation and borrowing from loved ones. These actions have only increased the amount of financial distress you are in.
Before you dig yourself into a deeper hole, you should take some time to consider how bankruptcy can help you overcome the financial challenges you face.
Chapter 7 discharges debts
Some debts may qualify for dismissal. Depending on the circumstances, you might meet the criteria for Chapter 7. This type of bankruptcy discharges certain kinds of debt so you no longer are liable to pay them. Though eliminating debt is an ideal solution, Chapter 7 has a very strict means test that you must pass before filing. Keep in mind that if you qualify, you must liquidate your assets, which may include your home and vehicles. There are special circumstances that may allow you to keep your house and cars.
Chapter 13 lowers your payments
If your situation is not eligible for Chapter 7, you could file for Chapter 13. Your creditors will work with you and your bankruptcy trustee to come up with a three-to-five-year repayment plan that you can abide by. Bear in mind that you must repay everything you owe at the time of filing. Your creditors will agree to lower the amount that you owe and write off the rest so you have a lower repayment amount. The courts must approve the repayment plan before it can go into effect.
Keep in mind that bankruptcy will stay on your record for several years. During that time, your credit profile will not be at its best. You may have trouble securing credit cards and loans. After you have completed the bankruptcy process, there are steps you can take to improve your credit profile. You should learn how to use credit and manage your finances wisely, or you could find yourself in similar circumstances in the future.