Unsecured debt includes credit card bills, personal loans, medical bills, some second mortgage loans and income taxes. The combination of these debts can be overwhelming, especially if you are only able to make the absolute minimum payment every month. If you are falling further and further behind on your bills and feel like you’ll never be able to reduce your debt, bankruptcy might be a good solution for you.
Many people struggle for years to pay bills even though it’s obviously impossible to pay them off completely in any reasonable amount of time. Making the minimum payment on a credit card simply increases the balance after interest is added the following month. Knowing you’ll be paying for a minor purchase for the next 10 or 15 years can be pretty depressing. However, there is an easy way to Get rid of most unsecured debt. Simply contact a bankruptcy attorney who could help you decide on the best way to deal with your debt problems so you can get financial peace of mind.
Bankruptcy offers options that many creditors will not give their customers. For example, if you qualify for Chapter 7 bankruptcy, you can Get rid of most unsecured debt permanently. Some credit card companies and medical collectors offer an option to settle debts for less than the total outstanding balance. While this may seem like a good option, it has a serious downside. By accepting the settlement offer, you may have to account for the forgiven portion of your balance when you file your taxes. The IRS rules consider forgiven debts over a certain amount as income. With bankruptcy, debts that are forgiven do not need to be repaid at all, and the process won’t create an additional tax debt.
With your unmanageable debts gone, you’ll have more money to pay for the necessities in your life. You won’t have to choose between paying the creditor and buying food or worry that credit card companies will call you when your payment is late. After your unsecured debts are gone, you can begin making wise financial choices that may help you avoid serious debt problems in the future.
