The popular layman's advice in Arkansas and all other states is to consider bankruptcy only as a last resort. However, a lot of emotional energy and money can be saved by considering bankruptcy as the first option, according to some debt relief experts. To clarify, it is wise to look at bankruptcy first as soon as it has been determined that the debtor's income is far too minimal to make even modest monthly payments toward the total debt owed.
In Arkansas and all other jurisdictions, studies show that people in all age brackets file for personal bankruptcy protection. The age group that contains the highest number of bankruptcy filings is the 25 to 44 age bracket. According to a prominent financial economist and university professor, a person can indeed rebuild his or her credit rating after bankruptcy.
When residents of Arkansas look into the question of filing for bankruptcy debt relief, they will generally learn that there are two basic types of filings for consumers with consumer debt. These are Chapter 7 and Chapter 13. Most consumers generally file a Chapter 7 bankruptcy, which is a powerful and even miraculous relief for certain overburdened consumers.
Arkansas residents contemplating a bankruptcy will often ask how the filing will affect their job. With respect to one's current job, no employer can fire or make employment decisions based on a bankruptcy filing. Furthermore, the employer will usually not even know that an individual has filed for bankruptcy.
More and more, the habits of consumers and the conveniences of shopping make the use of credit cards more prevalent than using cash. That is particularly true for online purchases, which are dependent largely on credit or debit cards. The fact is that these habits lead to overspending in some cases, and when the pattern is repeated over and over again, the individual or married couple may face a frustrating financial stranglehold. In order to obtain debt relief, there are several options, including bankruptcy, in Arkansas as well as in all other states.
Credit cards, medical bills and financial difficulties after divorce are three major ways in which consumers become overextended with personal debt. With the average family carrying $16,000 in credit card debt, many people in Arkansas and elsewhere may be attracted to the lure of debt consolidation or debt settlement companies. These companies promise to eliminate debts and get the debtors back on their feet financially.
In Arkansas and elsewhere, there is often concern over the heavy debt situation that some elderly couples are confronting. Sometimes, elderly individuals or couples can be in financial hot water due to going overboard in helping their children. When a couple's income recedes after retirement, they may seek various debt relief solutions, including bankruptcy, in order to survive financially and retain their independence.
Undoubtedly, one's credit rating will be hurt by a bankruptcy filing, whether in Arkansas or anywhere else. Most people, however, are already at the bottom of the line regarding credit scores. Where a large amount of unsecured debt is discharged in a bankruptcy, there is usually a rapid re-vetting of one's credit position by the credit bureaus and others. In some cases, an improved credit rating will come within a year or two after the bankruptcy discharge, mainly because the debtor owes no unsecured debt, and are paying only perhaps on their car and house loans.
For those who attempt to resolve their debt problems by consulting a debt negotiation company, there are special precautions to take and issues to consider prior to committing to that debt relief alternative. The most important guideline is to find a reputable, established company that follows the consumer-friendly debt negotiation rules adopted by the Federal Trade Commission. At the same time, an individual or couple residing in Arkansas will be well-served by also evaluating their debt situation very carefully to determine whether a bankruptcy authorized by federal law will be the better and more effective way of obtaining maximum debt relief.
A debt relief company promises to contact a person's creditors and work out a plan, often for pennies on the dollar, to pay off all debt in a matter of a few short years. Unfortunately, many people throughout the country, including in Arkansas, will choose this generally unworkable and sometimes fraudulent format as opposed to taking advantage of the safe and proven bankruptcy alternative that is provided by federal law. Recently, the Federal Trade Commission obtained a $7.9 settlement from a debt relief company that the agency accused of scamming clients with false promises.