There are two major options that consumer debtors in Arkansas and other jurisdictions can select between when contemplating a bankruptcy filing. They are Chapter 7, the liquidation or 'straight bankruptcy' section, and Chapter 13, the reorganization section. Chapter 7 involves discharging unsecured debt and going forward with a fresh start and a clean slate. That means that all credit card debt, medical bills and unsecured personal loans can be wiped out in a Chapter 7 pursuant to the provisions of the federal bankruptcy laws.
It is becoming clear that there is a crisis nationwide and in Arkansas among many persons who are moving into the retirement stage of life without having prepared a sufficient retirement fund and a retirement financial plan. Additionally, it is harder to set up an adequate plan the older one gets because, of course, there is less time available to do it. Further, for those who need debt relief, it may be better to keep a retirement fund financed and eliminate the bills through a debt relief remedy such as bankruptcy.
For residents of Arkansas and other states, there is no doubt that having a bankruptcy on one's credit report will send the credit score downward. However, it does not mean that new credit will be impossible to obtain. It also does not mean that one's credit record cannot be substantially repaired. This can often be accomplished within approximately 24 to 36 months after the bankruptcy, depending on individual fact patterns.
Debt settlement in Arkansas and elsewhere means that a consumer enters an agreement with a creditor to pay off a loan, often a credit card account, for less than what is owed. As such, debt settlement is the virtual end of the line for the account. This option occurs usually after a default and when the creditor knows that there is little likelihood of the account ever being paid in full. The consumer typically has the option to choose the debt settlement or the bankruptcy option.
When a debt management company promises help that sounds miraculous and asks for a substantial fund upfront prior to doing anything, the interested person should see a red flag. It would be wise to first research the company and check its rating with the business bureaus. For example, at this time no entity in Arkansas or elsewhere can eliminate student loan debt or make it go away, except in very limited circumstances within a bankruptcy filing upon proof of undue hardship.
In Arkansas and all other states, a consumer bankruptcy is one in which an individual or a married couple file to eliminate and/or reaffirm specified bills that are mainly considered to be consumer debts. This can include personal credit cards, personal loans, car loans, mortgages and medical debt. The debts owed by a business entity are considered business debts and are primarily dealt with in a business bankruptcy.
Individual retirement accounts and 401k retirement accounts, along with other recognized retirement plans, are exempted from seizure or interference in a bankruptcy. Federal bankruptcy law protects the owner's retirement plans so that they pass unaffected through a bankruptcy filing both here in Arkansas or any other state. The asset cannot be touched by the bankruptcy trustee to help pay for a person's debts, and the asset will remain effective and intact after the bankruptcy is discharged. However, the U.S. Supreme Court has ruled that an inherited IRA is not exempt and will be lost in a bankruptcy.
The first step to correcting and improving one's credit score is to obtain a copy of the credit report and examine it thoroughly. Although a bankruptcy technically may be reported for between seven and 10 years in Arkansas and elsewhere, there may be several inaccuracies or incorrect entries on a credit report that a person can correct on his or her own. Each type of credit blemish has a reporting window during which it can appear on your record.
Cancer patients in Arkansas and nationwide, and those with a history of cancer, are more than two times as likely to file bankruptcy than others. Additionally, there are ample reports that indicate that medical bills are a top cause of bankruptcy filings in the United States. One of the problems faced by cancer patients and cancer survivors is that cancer therapy expenses have increased two to three times faster than other medical expenses.
It is frustrating for many consumers in Arkansas when a bank makes extraordinary monetary demands when the borrower is out of a job or laid up with a disability. Lower income in the form of unemployment or other benefits won't keep a family financially healthy and can be the ticket to financial insolvency. However, bankruptcy attorneys universally report that their clients have expressed their desire and need to pay their bills despite suffering unfortunate setbacks.