If a consumer is overloaded with unsecured debt and unable to pay that amount off in a reasonable payment plan over the next five years, bankruptcy may be the best option available. When consumer debt overload spirals that far out of control, the truth is that strong and forceful measures must be taken for the sake of survival. A Chapter 7 bankruptcy will wipe out all unsecured consumer debt within a few months and allow for the individual or family to get a true fresh start. Arkansas residents will file the case here but the U.S. Bankruptcy Code will apply to processing and resolution of the matter.
Despite all of the student loan defaults by economically pressed graduates, federal lenders made about $66 billion on loans for the federal government between 2007 and 2012. The industry is not suffering and would not suffer if Congress amended the law to liberalize the current standards for discharging such loans in bankruptcy. Arkansas residents stand with the rest of the country in hoping to see reform with respect to the dischargeability of student loans.
Just like others nationwide, Arkansas consumers may also find it difficult to resist deals that look too good to pass up. It is often reported that credit card debt is the cause of many bankruptcy filings, and when looking at the devious ways in which retailers get consumers to spend their hard-earned money, it is not surprising. While many people think twice before falling for obvious tricks, such as "buy two for the price of one" offers, it is often the sneaky perks offered by stores that trick them into buying unnecessary items.
Many hard-working American families find themselves in a repetitive cycle of overwhelming debt that has spiraled out of control. This is related in part to a poor job market, low hourly wages, health care insurance that refuses to pay for essential services and consumer over-use of credit cards to purchase inflation-ridden consumer necessities. One industry that has taken advantage of the struggles of these families is the predatory payday loan industry. The companies have in effect forced many consumers in Arkansas and throughout the country into filing bankruptcy to eliminate harassing debt collections from the companies and their assignees.
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.