There are hundreds of ways to find yourself being harassed by debt collectors, but the exact details of how you got here are not important. What is important is how you are going to get things back on track.
As some Kentucky residents may know, the U.S. Supreme Court decided on whether a debtor may automatically appeal if a payment plan is not accepted by the bankruptcy court. A Massachusetts debtor had petitioned the court to rule because of differences in circuit court opinion on this issue.
Debt has become a serious problem for many people in Kentucky. Those looking for debt relief options are often bombarded with advertisements from many companies and organizations promising what appears to be simple and fast solutions. The catch is that most of these solutions involve a form of bankruptcy. While bankruptcy is and should be considered a tool for dealing with debt, there are important laws and consequences to consider.
Bankruptcy is a big decision for a debtor to make, and most debtors don’t take that decision lightly. When an individual gets to the point in their financial life that they are ready to look into bankruptcy, it is important that they understand the options for handling their debt. Whether one is considering Chapter 7 or Chapter 13 bankruptcy, a filing can result in a credit setback lasting for a number of years. Though this shouldn’t be a deterrent to filing for those for whom a filing makes sense overall, it should considered.
Eddie Montgomery of the country music duo Montgomery-Gentry recently filed for Chapter 7 bankruptcy in Lexington months after the closure of his steakhouse in Harrodsburg, Kentucky. Montgomery, a resident of Danville, reportedly listed a total of $1.9 million in assets and $13.4 million in debts, most of which stem from his failed restaurant.
The number of young Americans struggling to pay their student loan bills, as our readers know, is greater than any other time in history. Unfortunately, as we’ve pointed out before on this blog, bankruptcy provides no relief for struggling graduates. The best hope for those carrying heavy loads of student loan debt is to sign up for alternative payment plans. These plans can be manageable, but they don’t address a major reason those loads are hard to carry in the first place: unemployment or underemployment.
Bankruptcy is hardly every an easy decision for people to make. There is much to consider, including both the negative credit consequences as well as the ability to start afresh. For some people, bankruptcy offers the chance to avoid foreclosure or at least reduce the chance of foreclosure. Another positive aspect of bankruptcy, for those whose homes have declined in value, is the possibility of getting rid of second and third mortgages. This is referred to as lien-stripping.
Burdensome debt is something many Americans struggle with. For some, the burden can become so great that the possibility, any possibility, of getting out of debt looks tempting. But, of course, it is important for debtors to exercise caution in considering offers for debt relief services. That is particularly the case now with respect to tax debt relief schemes, which are increasing as the IRS goes after Americans that failed to pay taxes during the economic downturn.