Narrowly avoiding bankruptcy, and after several weeks of a partial shutdown of the United States Government, Congress finally reached an agreement to raise the debt ceiling to avoid defaulting on US government loans. Too bad the rest of us can’t put off our debts by increasing our credit limits. Even if we did, it’s a band-aid repair to a long-term hemorrhage. By Feb 7, 2014 our government will be in the same situation if a more permanent solution is not implemented.
While the total amount of debt owed by individuals cannot compare to the amount the national debt, the effect of having too many expenses and too little income to satisfy our debts can cause havoc in our lives. Having your car repossessed, home go into foreclosure, and being hounded by bill collectors day and night can trigger your own personal or business shutdown – or at least make you feel like you are under siege.
The US Bankruptcy Code
While elected officials aren’t going to help us pay our individual or business debts, Congress has enacted bankruptcy laws that do provide a solution. Based on the current bankruptcy code, in approximately 100 days from filing a Chapter 7 Bankruptcy, nearly all of your personal or business debt can be eliminated and you can start over. Or, Chapter 13 Bankruptcy allows you to get current and repay your secured debts (mortgage, car loan) while relieving you of some of your unsecured debt (credit cards, pay day loans) over a period of several years.
If you find yourself overwhelmed, unable to keep up with your debt payments, or looking at 10+ years of minimum payments to retire your debts, consider bankruptcy. In fact, filing a Chapter 7 Bankruptcy case today can eliminate all of your debts before our government finds itself right back in the same situation it faced earlier this month.
Illustration courtesy StockMonkeys.com