The incapacity to manage credit card debt can be an insurmountable obstacle for some people. Filing for bankruptcy may appear to be the most expedient option, but it is important to consider the consequences of such a decision.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was enacted after an evaluation of bankruptcy laws a few years ago resulted in the passage of a more stringent law. This new law makes filing for bankruptcy more difficult than before.
To qualify for chapter 7 bankruptcy, you must earn less than the state's median income. In essence, a comparison is made between your average compensation over the past six months and the state median salary. If your income is greater than the state median, you must satisfy a """"means test"""" before you can file for bankruptcy. This test employs a variety of variables to determine if your monthly income is below $100; if it is, you are eligible to file.
When filing for credit card bankruptcy, all non-exempt assets must be surrendered. The assets that are not exempt under federal or state law are not exempt. State-specific exemptions may include exemptions for real estate and motor vehicles. These assets are transferred to the bankruptcy trustee, who then sells them to pay your creditors.
In addition, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 mandates that you participate in credit counseling through an authorized agency. This must be accomplished 180 days prior to pursuing bankruptcy.
Insolvency with a credit card has numerous negative consequences. First, it will have a negative impact on your credit scores, which can harm your credit for years. The bankruptcy filing will remain on your credit report for ten years. Therefore, it will be extremely difficult for you to acquire credit, a residence, a vehicle, or even life insurance.
Second, you will suffer a loss of assets. You can have your bank accounts closed or suspended. Additionally, you may lose other investments, including equities, bonds, and real estate.
Consider the personal and public stigma associated with declaring bankruptcy. If you prefer to keep your finances private, you will be unable to do so, as bankruptcy proceedings are public information.
Instead of attempting to avoid debt, you should attempt to reduce it to a manageable level. You can accomplish this by disputing your credit card debt. Consider hiring an experienced consumer defense attorney to handle this for you. A consumer defense attorney can contest your debt to creditors and shield you from bankruptcy. With this option, creditors are removed from your life, and you have the option of paying off your debt at a reduced rate or benefiting from federal and state laws.""
" - https://www.affordablecebu.com/
