The words "bankruptcy" and "debt free" generally are not mentioned together in the same sentence. Most people file for bankruptcy because they are in dire economic straits. Their debts far exceed their cash flow and net worth making it impossible to pay off their obligations. Because of this, they will file for bankruptcy protection. But, can doing so truly make you debt free? There are no easy answers to this question but history does show us that many have actually suffered through the pain of bankruptcy and then emerged completely and totally debt free.
In order to become debt free, you will need to file either Chapter 7 or Chapter 13. Chapter 7 bankruptcy entails liquidation but there is more to it than that. Namely, within this category of bankruptcy, it may be possible to have your unsecured debts discharged. By discharged, that means all or a portion of them will be completely eliminated.
With Chapter 13 bankruptcy, the process is a bit more complicated but the end result could very well be that you end up debt free. This form of bankruptcy entails setting up a repayment plan where your debt is restructured. You will be required to pay back your debts and end up debt free within 3 to 5 years. As with Chapter 7 bankruptcy, it may be possible to eliminate a host of your unsecured debt as the courts can discharge all or a portion of it in Chapter 13 as well. The entire process of Chapter 13 bankruptcy may take a longer amount of time but in the end you will not have the specter of debt hanging over you.
Of course, you also need to be able to move forward in an effective manner when you seek protection under the bankruptcy laws.
What does that mean? The meaning is nothing hidden. Once you have exited from bankruptcy, you need to curtail the activities that lead you into financial disarray in the first place. Most will agree with this assessment...in theory. However, they need to follow through with concrete actions in order to arrive at the desired result.
When you once again become debt free, you need to make the appropriate decisions which will ensure you stay debt free. If not then you will likely find yourself in the same difficult position you were in prior to entering into bankruptcy. Such a cycle would not exactly be the most appealing scenario to entertain. Yet, many do fall into such a problematic trap which could prove to be even more troubling the second time around.
In general, the entire process of Chapter 7 or Chapter 13 bankruptcy makes it possible to transition into a new lifestyle with new spending habits. Most will take advantage of the lessons of filing for bankruptcy as a means of discovering what is required to remain debt free from that point forward.
It is never easy to live a life that is completely debt free but those capable of eventually doing so can take solace in the fact they will never have to deal with the shackles excessive debt can attach to their lives.
In order to become debt free, you will need to file either Chapter 7 or Chapter 13. Chapter 7 bankruptcy entails liquidation but there is more to it than that. Namely, within this category of bankruptcy, it may be possible to have your unsecured debts discharged. By discharged, that means all or a portion of them will be completely eliminated.
With Chapter 13 bankruptcy, the process is a bit more complicated but the end result could very well be that you end up debt free. This form of bankruptcy entails setting up a repayment plan where your debt is restructured. You will be required to pay back your debts and end up debt free within 3 to 5 years. As with Chapter 7 bankruptcy, it may be possible to eliminate a host of your unsecured debt as the courts can discharge all or a portion of it in Chapter 13 as well. The entire process of Chapter 13 bankruptcy may take a longer amount of time but in the end you will not have the specter of debt hanging over you.
Of course, you also need to be able to move forward in an effective manner when you seek protection under the bankruptcy laws.
What does that mean? The meaning is nothing hidden. Once you have exited from bankruptcy, you need to curtail the activities that lead you into financial disarray in the first place. Most will agree with this assessment...in theory. However, they need to follow through with concrete actions in order to arrive at the desired result.
When you once again become debt free, you need to make the appropriate decisions which will ensure you stay debt free. If not then you will likely find yourself in the same difficult position you were in prior to entering into bankruptcy. Such a cycle would not exactly be the most appealing scenario to entertain. Yet, many do fall into such a problematic trap which could prove to be even more troubling the second time around.
In general, the entire process of Chapter 7 or Chapter 13 bankruptcy makes it possible to transition into a new lifestyle with new spending habits. Most will take advantage of the lessons of filing for bankruptcy as a means of discovering what is required to remain debt free from that point forward.
It is never easy to live a life that is completely debt free but those capable of eventually doing so can take solace in the fact they will never have to deal with the shackles excessive debt can attach to their lives.
