The first step to understanding the benefits of taking certain actions is to understand the action itself. When you are looking for ways to cut down on expenses and get out of debt it is beneficial to have a grasp of how different debt repayment plans can eliminate your debt load. There are several schools of thought on how to get out of debt, from the snowball method to the APR and quick elimination methods; there is bound to be a strategy that works for you. The snowball method of debt elimination provides for focusing on one debt at a time and once it is paid off using the monthly payment for that debt to add to the monthly payment for the next debt. In this way, the payment snowballs and gains momentum as debts are paid. The APR method dictates repayment of the highest rate debt first, and then moving to the next highest rate loan. With the quick elimination method, debtors pay off what they can quickly and then concentrate on the next fastest debt. This gives people a sense of accomplishment and helps them stay on track.
Another popular way to get out of debt is to file for bankruptcy. But the idea scares a lot of people off and too many people are failing to take advantage of all bankruptcy has to offer. To help combat this problem, it is helpful to understand how bankruptcy works before dismissing it as a debt relief option. Here are four simple steps to understanding bankruptcy:
- Filing a case: filing a case starts with getting your debts gathered and talking to an attorney about what you owe, and what you make. An attorney will go over the numbers with you and prepare your case for filing. All you have to do is provide the data and review the case for accuracy before it is filed.
- The automatic stay: the automatic stay is in place the instant you file, and it prohibits lenders from contacting you about their debt. This is the single biggest benefit reported by most people who file for bankruptcy, because it gets creditors off their back and relieves the stress that goes along with being harassed by lenders.
- The 341 hearing: this is the only hearing most people have to go to when they file a bankruptcy case and it is very informal. There is no judge present, and your attorney will be there to make sure you understand any questions you are asked.
- The discharge: this is the goal of every case, and it is the official entry by the Court that your debts are no longer due. A discharged debt cannot be collected on later, and you will not be asked to make payments on debts that have been discharged.
Bankruptcy also provides a chance to start over, without overwhelming debt. Let us help you today.
For more information about how bankruptcy can help you, contact us today at www.DsouzaLegalGroup.com. We will go over the facts of your case and let you you’re your next step.