Is It Time To File For Bankruptcy?
So you’ve found yourself in debt. How did you get here? How will you climb up from under this heap of unpaid bills, collection agency letters and phone calls? Can you move forward on your own? Do you need to file bankruptcy? Slow down and try to understand where you currently stand in your situation.
First you must to look at the type of debt you are under. Most debt falls into two categories – secured and unsecured debt.
A secured debt is a debt that is attached to an asset. For example, if you borrow money to purchase a home, the mortgage is a secured debt. When you obtain a mortgage, you must sign a contract with the bank stating that if you do not pay the balance owed over a certain period of time, the bank can legally take your house from you. Another example of a secured debt is an automobile loan. Again, you are taking out a loan with the automobile as collateral. The bank can repossess the car if the debt is not paid.
Medical bills, credit cards, department store cards, personal loans, student loans, and bounced checks are all examples of unsecured debt. There is nothing being held to be used as a guarantee if the debt goes unpaid.
Some debts are considered better than others depending on what the credit was used for. A student loan is considered good debt because the monies are going towards your education. This is most often seen as an investment therefore a positive use of the debt.
An example of bad debt includes the purchase of disposable items or durable goods using high-interest credit cards and not paying the balance in full. Every month that you make a partial payment on your credit account, you are charged interest. The disposable item you purchased continues to decrease in value, and the amount you paid for it continues to increase.
Now, if your head isn’t already spinning, you need to make a plan going forward. For most people, this is a daunting task. This is why seeking the advice of a professional is probably a good way to start. Bankruptcy lawyers are trained to be up to date on all the ever-changing bankruptcy issues, codes and laws. Since every state has its own set of rules and regulations, it is a good idea to find the right legal representation from your state. Most major cities will have bankruptcy attorneys. For example, in Texas you will find there are City of Houston Bankruptcy Attorneys, San Antonio Bankruptcy Attorneys, Forth Worth Bankruptcy Attorneys, City of Dallas Bankruptcy Attorneys and so on. Seek out the help you need to start you on the road to recovery.
Tags: Debt Management