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Filing Bankruptcy to Become Debt-Free?

February 06, 2012 | Comments: 0 | Views: 97

Over the last 20 years, not many people even consider what it would like to become debt-free. In the past, our grandparents didn't know what it was like to owe people money. All the way up until the 70s, people saved and paid cash for items they wanted. Most of the department stores had layaway plans that allowed an individual to make a minimum payment and hold an item until they could come back and pay the balance. Credit cards were almost nonexistent until the 70s. Ever since then, America took off down the road on the have it now and pay for it later pay plan with credit cards. At the end of 2011, the numbers came out for the amount of credit card indebtedness of the average American and it was an astounding $16,000. Considering the average pay is just about double that, it's obvious we are going down the wrong road as a country. What happened to being proud of being debt-free? Now the only people that are debt-free are probably homeless.

Nowadays, credit has become a necessary evil, but can be useful if used in the proper format. Nothing is wrong with taking out a mortgage to buy a home. For one, you can always write off the interest on the loan helping out with your taxes at the end of the year. Where the problem begins is with credit card debt. If left unchecked it can burn like a wildfire out of control only to end up in a bankruptcy filing.

The good news is if this happens, filing bankruptcy might be a good solution to get back on the road to becoming debt-free. If someone has a large amount of credit card debt, filing Chapter 7 bankruptcy just might be the answer to the question of how to become debt-free. The great thing about Chapter 7 bankruptcy is it wipes out all unsecured debt. Typically, unsecured debt is credit cards, medical bills, personal loans and payday loans. It won't discharge a secured debt like a mortgage or an automobile loan. In some cases, it does allow the debtor enough extra money to save their home or auto by discharging all the unsecured bills. What happens to most people that are buried under a pile of credit card bills is the interest alone eats them up. It ends up with the debtor robbing Peter to pay Paul every month just to make ends meet. It almost becomes an addiction to keep their credit cards open and not even considering that the balance is not even going down. This is why filing bankruptcy will stop all the craziness and allow the debtor to get their head together and think on their past financial failures.

Filing Chapter 7 bankruptcy usually takes about 4 to 6 months from start to finish. If the debtor has a large amount of unsecured debt they might be able to walk away from their bankruptcy discharge being virtually debt-free or close to it. As long as they learn from their past mistakes, they should be able to get a fresh start and get on the road to financial recovery.

The author started DebtFreeBankruptcyAttorney.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.

Source: EzineArticles
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