Please note that the following page and its content do not constitute legal advice and Debt Settlement One is not licensed to practice law or provide legal advice. If you are considering bankruptcy then you should consult a professional bankruptcy attorney to determine the most likely outcome for your exact circumstances. If you are seeking an alternative to bankruptcy please contact one of our trained debt counselors.

All Of The Negatives And None Of The Positives

There are certain circumstances when filing for bankruptcy may negatively impact your finances and credit rating, without actually leaving you debt free – you essentially face all the negatives without receiving any of the benefits. Regardless of your circumstances and situation you will find that your credit history is negatively impacted for the next 7 to 10 years and that you may struggle to find gainful employment as a result of filing bankruptcy.

The Above Average Earner

All figures used by the courts are based on national and county statistics. If you earn more than an average wage then it is possible that you will be required to file for Chapter 13 Bankruptcy. This means that you have to hand over all of your disposable income, and you are only allowed to keep money to pay for necessities.

Your monthly necessities are calculated using average figures. This means that if you have what would be considered an expensive car that you are still paying for, or you pay more than an average rent, then you could be forced to sell your car or move in order to free up more money to repay your creditors. There are even cases where a court has demanded that children be removed from private school so that the school funds can be used for debt repayment. Check with your local census bureau to determine the average figures for your region.

Strict Court Repayment Schedules

The averages used in Chapter 13 Bankruptcy have been proven so strict that only a small fraction (approximately 1/3) of cases is completed. Once Bankruptcy is filed there are many reasons why the program may not be completed. No matter what the reason, the Bankruptcy remains on your credit report for 10 years.  Another potential problem is that if you were to miss a payment then the court could force you to repay all of the debt.

The Asset Owner

Even if you own your own home or car, you may not escape the difficulties associated with bankruptcy court rulings. It is conceivable that the court can force you to sell some of your assets in order to facilitate larger repayments against your outstanding debts. Consumers are entitled to a portion of the house value, a portion of the vehicle value, and a wildcard exemption. This is awarded after you have repaid any outstanding mortgage balance.

The Fraudulent Debtor

Another problem arises when a creditor can prove your case was fraudulent. If a lender can show the courts that you had no intention of meeting your agreed repayments then you may have a bankruptcy registered on your credit report and still end up repaying the entire debt.

Is Bankruptcy Right For You?

If you earn an above-average wage, own your own property or car, or it can be proven to have fraudulently missed payments then bankruptcy may not be the clean slate that you are looking for. In these situations and many other bankruptcy cases, our debt settlement program proves to be less costly, have less of a negative impact, and requires less time to clear debts.