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Signs that bankruptcy may be an option
Tuesday, Sep 15, 2009
By Jennifer Hewitt
In a recent column for the Jersey Journal , Alky Danikas, lecturer at St. Peter's College in Jersey City, New Jersey, noted that being behind in mortgage payments and facing foreclosure may be indications that a consumer should file for bankruptcy.
Another sign would be if a consumer can't pay off their unsecured debts, which would include credit carddebt.
"Ideally, one should be able to pay off unsecured debt in no more than five years," Danikas wrote.
When it comes to other options, Dankias advises against property owners taking out a home equity loan when trying to pay off their credit card debt. He said doing so will reduce the consumer's equity. Danikas also advised against cashing in retirement funds when trying to pay off debt, as these are often protected when filing for bankruptcy.
Regarding the two forms of bankruptcy, Danikas said that Chapter 7 may be good for people who have very little non-exempt
assets. Chapter 13 bankruptcy sets up a court-approved plan that would pay off the consumer's debt in three to five years.
A recent story from USA Today noted there have been 954,911 bankruptcy filings from January to August of 2009. That's up from the same time in 2008, when 703,732 filings were made.
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A recent story from USA Today noted there have been 954,911 bankruptcy filings from January to August of 2009. That's up from the same time in 2008, when 703,732 filings were made.
Recommended stories
• Bankruptcies increase in 2009 According to a recent report from USA Today, more people are filing for bankruptcy as the recession wears on. Sep 14 2009
• Things to consider before bankruptcy For some consumers, bankruptcy may be the only option for finding
some debt relief. Sep 2 2009
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• Get a free credit report. Find a professional to correct your credit report. Apply for a new credit card. Visit the Bills.com Credit Card Center .
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Resources that save you money
• You might reduce your monthly payments by refinancing your mortgage. Get no-cost, online mortgage refinance quotes from up to four prequalified lenders.
• Buying a home? Get no-cost quotes online for competitive, fixed-rate mortgages from up to four providers.
• Reduce your debt up to 50%. Get matched with pre-qualified debt consolidation experts.
• Get a free credit report. Find a professional to correct your credit report. Apply for a new credit card. Visit the Bills.com Credit Card Center .
Also, make sure to get a free financial health check-up with Bills IQ!
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