We devote a lot of time speaking to our clients to get to know them, learn more about them, and figure out how best to help them. Having helped individuals become debt free in Boston, we have learned that average bankruptcy clients also frequently have a sad story. While bankruptcy cases may be similar, we know that everyone is different and that each individual’s circumstances are also other.
THE AVERAGE AMERICAN HOUSEHOLD OWES MORE THAN $250,000
Owing more than a quarter of a million bucks is a considerable amount for many people to think- about. It is not surprising that so many people fear if the financial circumstances change within their household. This goes some way to explain why a job loss, reduction in hours, an unexpected invoice, or even a sudden medical cost can have such a striking effect on family finances and is the final straw for many people.
DON’T HAVE A MORTGAGE OR Auto Loan?
Even if you rent your home, have paid for your car outright, and don’t owe student loans, you may still have additional borrowings such as a loan, or you may use credit cards more than you would like to.
Can you resort to applying for loans or even using your credit cards for everyday things as your paycheck does not seem to last you all month?
The property value tends to rise more than so lots of people having a $170,000 mortgage will have a house worth considerably more than they paid for this.
Presently for 2016, Nerdwallet suggests that property prices will grow by 4-5% as demand increases faster than supply. But during financial crises like those suffered recently, property values can collapse, meaning that individuals owe more on their home than it is worth. Many individuals will discover that their home isn’t worth anything like what they owe it, and they can’t promote it because nobody would like to pay more than it is worth leaves them stuck with a house they can’t afford or sell.
On average, a brand new car will depreciate around 20% during the first year, 10 percent the moment it’s driven off the forecourt. During the second and third years, it will decline another 15%, meaning it is only worth around 75 percent of what it cost new. ByCheatSheet, you can save up to 33 percent by buying a year old car compared to a brand new one. Factor in interest and how many vehicles will depreciate by more, and it’s easy to see how folks are paying off a car worth much less than their loan.
ALTERNATIVES TO CHAPTER 7 BANKRUPTCY
You may know someone who has successfully discharged their debts or has noticed some persuasive reasons to consider filing for bankruptcy. If you are suffering from financial worries, and are trying hard to pay for your groceries as well as your debts, then maybe you’ve already thought about speaking to a Attorney.
We are aware that people like you’re often reluctant to declare Chapter 7 Bankruptcy due to concerns about their credit score or because they wish to keep their home or their car. Nevertheless, having the facts and understanding the best option will provide you the peace of mind you want. There are many choices for Chapter 7 bankruptcy, and one of these might be ideal for you.
CHAPTER 11 BANKRUPTCY
Chapter 11 bankruptcy is for businesses looking to stay in operation. You won’t avoid bankruptcy but will be able to adjust your debts. You will also have the ability to lower your debt or raise the timescale to cover it back; helping you continue trading will provide you more of an opportunity to protect your debts back.
CHAPTER 13 BANKRUPTCY
Chapter 13 bankruptcy is known as the repayment or reorganization bankruptcy and allows you to cover back your debts as time passes. It might be right for you if your salary is over a particular amount, or you also want to keep your home. An experienced Massachusetts Boston bankruptcy attorney near me MA will be able to inform you whether Chapter 7 or Chapter 13 bankruptcy is right for you. Chapter 13 Bankruptcy is most often ideal for anyone with mostly consumer debts, such as those caused by deliberate overspending.
Nonetheless, in our experience, the reasons people file for bankruptcy are to perform with job loss, injury or illness, or divorce, instead of maxing out credit cards on designer clothes and other luxury items. If you would like to prevent foreclosure or stop the car from being repossessed, Chapter 13 Bankruptcy could be the solution. This option allows you to catch up with mortgage and car payments over time so that you may keep your house and car.
TALKING TO CREDITORS
Only talking to your lenders can help.
Your creditors know they will often get less than you owe them if you file for bankruptcy, and thus this can be a powerful bargaining tool for you. Threatening to file for bankruptcy can get the amount you owe lower or the terms of repayment improved. Your creditors would like you to repay some money as opposed to no money.
DEBT COUNSELLING SERVICES
Debt counseling services can allow you to talk with your creditors and manage your money better may let you know more about your income and outgoings to pay off your debts. Again, it would help if you informed someone that you are struggling to get the help you want. Debt management businesses try to negotiate you a much lower figure with your lenders, then charge you a monthly payment, and pay your creditors on your behalf.
But, there are possibly several issues with this.
Your creditors don’t have to agree to a lower figure and sue you to collect the entire amount you owe. Also, debt management companies can have a substantial cut of your monthly payment in our experience, so it takes you longer to pay your debts off. We’ve even heard of unscrupulous debt management firms taking money rather than paying back creditors. Although we are biased, here’s why we think hiring a bankruptcy lawyer is far better than hiring a debt consolidator.
We are aware that every option has its advantages and disadvantages and that one of the alternatives to Chapter 7 bankruptcy may be perfect for you. Suppose you do not believe your debts warrant filing for bankruptcy, or you’re concerned about talking to your creditors or expecting a debt management company. In that case, we recommend you speak to an expert Boston Bankruptcy Attorney first to learn more about your options. Based on our seasoned years of assisting many people in Boston become debt-free, we all think we’re capable of knowing which option will be perfect for you.