Job loss, illness and divorce can all cause a person to suddenly be faced with more debt than they can ever hope to repay. Creditor don’t care about their customer’s personal problems, yet they call regularly requesting payment. This constant harassment does nothing to reduce the debt or the stress from knowing it’s there. Often, the best solution to this problem is to file for bankruptcy protection. Bankruptcy can eliminate many of the most common debts, stop the phone calls and allow a person to see the light at the end of the tunnel.
Filing for bankruptcy protection is a process. It starts with determining whether the case is eligible for Chapter 7 in Dayton OH. An attorney may do a means test, which consists of adding all income and assets and subtracting debt to determine a person’s ability to repay their debt. When debts exceed income or ability to pay without causing serious hardship, a person may be eligible to have their unsecured debts discharged. This means they won’t have to repay them and the creditors cannot contact them asking for payment.
Another part of the bankruptcy process is credit counseling. Although some people get into excessive debt through circumstances beyond their control, many people resort to bankruptcy after they spent too much money with credit cards. Learning how to budget and save money are good habits that might help a person avoid getting into financial trouble again. People who file for Chapter 7 in Dayton OH have two credit counseling sessions before their debts are discharged.
Bankruptcy is not a simple answer to overspending. There are consequences to using this method to eliminate debt. People who get bankruptcy protection have a difficult time getting affordable credit for several years after their filing. Lenders see them as a severe risk and if they are able to get credit, it will likely come with a high interest rate. The notation remains on their credit report for an entire decade and will affect their credit score. Generally, the only way to improve that score is to take one or more high-interest credit accounts and pay the bills on time.