Bankruptcy Basics

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We get a lot of questions about bankruptcy and how it can help.    Below are some of the most asked questions and answers.

*  How do I get out of debt or get rid of debt?

*  What is the best way to pay off credit card debt?

*  Should I get a loan to pay off credit card debt?

*  I am drowning in debt.  How can I clear my debt?

*  How do I become debt free? 

*  What is the quickest or fastest way to get out of debt?

*  How to get rid of tax debt? 

*  Do you provide a free consultation?

These question all have a common theme - what is the best way to get out of debt and

the answer is the basically the same for each question.   Call Bruce W. White, a Richmond Attorney, for a free, personal phone consultation.  He is experienced and knowledgeable of the bankruptcy process and can help you resolve your financial woes.

There are several ways you can solve your debt problems

Easier said than done.  If you are looking for answers to any of the questions above, this option is probably too late in coming.  It could work if all of your creditors are willing to work with you, but it will not work if some of the creditors are not willing to work out a repayment plan with you.  The unwilling creditors can and will begin the process of collection, judgments and garnishment of your wages or bank account. 

A Debt Settlement company will pay your debts of at a lesser amount, maybe 20% to 25% of the total amount owed.   To qualify, the Debt Settlement company will require you to stop further payments on the debts, which will cause the creditors to begin the collection process.   The Debt Settlement company will then negotiate a reduced payment to these creditors and pay them with the money you send to the Debt Settlement company.  To effectively use a Debt Settlement company you will need to pay the total lump sum payment required to settle all of the debts.  Most people don’t have that kind of money available.   For example, if you have $30,000 in credit card debt, you may have to pay $6,000 to $8,000 up front to the Debt Settlement company.   Most clients will not have that kind of money available.   The Debt Settlement Company may suggest a monthly payment plan.   This is not a good option as none of your creditors get paid for 6 months or more while the settlement terms are being established.   During this time, your creditors can and will be calling, writing, suing or garnishing your paycheck or bank account. 

A Credit Counseling Agency can consolidate most of your credit card debt and some or all of your personal loans into a single payment made through the Agency.   You will be required to pay the debts in full plus interest.   Credit Counseling agencies are not always able to include all of your debts, and the payment may be too much to handle, especially if you have other debts not included in the Credit Counseling program.

 Most people will not have the resources to get a loan by the time the credit card debts become overbearing.  Obtaining a home equity loan or some other secured loan may be an option, but please call Bruce W White before you use up the equity in your home through a home equity loan.   A personal  bankruptcy may allow you to retain your home and your home equity.  You may be able to get rid of your debt without having to incur a new loan secured by your home.

This option is the most economical and most efficient way to get out of debt.   It eliminates all credit card debt, not just some of it.   It can get rid of hospital bills, personal loans, credit cards, old taxes, and even SBA loans.  The up front fees and cost average $1,700 to $2,800 for most people, depending on your situation and the complex nature of your case.  While filing bankruptcy obviously impacts your credit score, so do the other options listed above.   More importantly, it gets rid of your debt forever and quickly, and your credit score will bounce back once you complete your bankruptcy case and get your Discharge Order.

Typically, your credit score will rise 100 points within a year following the completion of your case and it will continue to rise as long as you pay your remaining debts (rent, car payment, utilities) on time.  You will be able to finance a new or used car shortly after you complete your case, and obtain new credit through secured credit cards or seeking out credit card companies who will provide you with new credit.  Call Bruce W White, bankruptcy attorney for more information.