America is drowning in debt. Millions are living paycheck to paycheck and worse. For a lot of Americans at the end of the day, payday has come and gone and still the ends do not meet. The average middle-class household, those households with a net worth of $10,000 to $50,000 a year, is carrying on the average over $16,000 dollars in credit card debt. Research has shown that these credit cards are taken out out of necessity, not extravagance. Families need food, “basic need” bills paid (electricity, gas, water etc.) not to mention Doctor’s visits and the medications. Most families are not going out and spending thousands on vacations and shopping sprees, rather they are simply trying to survive. But the question is; When is enough enough? What are my options to get out of this mess, or at least get my head above water? Debt forgiveness programs or bankruptcy?

Debt Forgiveness Programs Vs. Bankruptcy

First of all, let’s be perfectly clear,  former President Obama’s rumored “Credit Card Debt Forgiveness Act” does not exist. No federal government funded credit card debt relief exists. Avoid working with any company suggesting they help you tap into an obscure public-sponsored financial assistance program. Private for-profit and non-profit companies do help borrowers struggling with credit card debt. The government regulates these organizations.

Second of all, the IRS won’t erase your tax debt just because you say you can’t pay it. There are scores of debt forgiveness options out there for you, some offering seemingly unbelievable benefits to you and incredible amounts of money “could be” saved, erased or forgiven. You have heard the saying, as have I, “if it’s too good to be true, then it probably is.” I think you’re starting to understand my point, even when debt forgiveness options are offered, be forewarned, these options can be loaded with traps, almost impossible rules to be followed, damage to your credit scores and unexpected tax bills. Bankruptcy may be the answer that you are in search of.

Why am I giving you all of this information? Because there is a thriving industry of hucksters and scam artists out there actively targeting and digitally stalking you, along with millions of other Americans through television spots, radio advertisements, mail offers, and of course spam email and internet ads. The constant phone calls, threatening letters and perhaps lawsuits wear on a person. These liars and sharks will try to convince you that because you are drowning in debt, bankruptcy is not the way to go, there are ways to escape your massive debt without serious consequences. It is true, some debts can be forgiven, but there is always a catch. Informing yourself of these catches and traps can help you decide whether debt absolution (forgiveness) or Bankruptcy is the best route for you to obtain the results and get the relief you are wanting.

Debt

Creditors can and do forgive balances as a part of debt settlement. If the creditor has the suspicion that you will file for bankruptcy or not pay your bill, then the decision could be reached that getting something out of you is better than getting nothing. Just like forgiven debt, the amount forgiven is seen as income and may trigger a tax bill. You could also expect damage to your credit scores seeing that few credit card issuers will even discuss forgiveness with you if you are current on your bills. If your creditor sues you, you would have to deal with judgments and perhaps face wage garnishment.

Bankruptcy May Be The Way Out

For many people, filing for Chapter 7 bankruptcy is the better option versus the forgiveness/ settlement process. Bankruptcy filings halt collection actions and lawsuits, and a Chapter 7 filing can legally erase debts while ending garnishments. Filing for bankruptcy will trigger the automatic stay, preventing creditors from taking action to collect, prevent creditors from repossessing property such as cars, including calling you, suing you, or sending you letters. You may be able to discharge your obligation to repay any of your dischargeable debts (unsecured debts such as credit card debt). By using the bankruptcy exemptions, many debtors can go through the bankruptcy process without losing any of their property. While a bankruptcy filing will remain on your record for 7-10 years, because many debts can be discharged in bankruptcy, many debtors begin improving their credit rating after filing for bankruptcy.

Contact Us

All of this is overwhelming, confusing and not easy to navigate without help. That’s why we are here. Filing for Bankruptcy can be a complicated process for people who are overwhelmed by debt. There are Bankruptcy laws in place to protect people in your situation but you will need an attorney to guide you through this process. Our bankruptcy attorney will help you understand the bankruptcy courts and know how to help you decide under which Chapter to file. CLICK HERE to contact us now.