Bankruptcy or debt settlement in Oklahoma is a choice many people struggle with. Bankruptcy and debt settlement are both options that an individual might consider when they are unable to meet their financial obligations. Struggling to pay off significant debt can cause a person to feel helpless and unable to take control of their life. If you are in this situation, you should consult with an attorney to discuss what options work in your case. Both bankruptcy and debt settlement can provide much-needed benefits and protections for individuals with considerable debt. Deciding on the right course of action will depend heavily on the specific circumstances in your case.
What A Bankruptcy Accomplishes
There are different types of bankruptcies in Oklahoma. If you file Chapter 7 bankruptcy (called a straight or a liquidation bankruptcy), and succeed in completing that process, you might rid yourself of most of your debts via liquidating certain of your assets. There are some types of debt that you will not be able to eliminate through Chapter 7 bankruptcy though. For instance, student loans and child support are two examples of debts that you must continue to pay off even if you file for bankruptcy. However, for many individuals, Chapter 7 bankruptcy can lead to a fresh financial start.
Not everyone can file Chapter 7 bankruptcy, and not everyone will want to choose this form of relief even if they are eligible. Chapter 13 bankruptcy (called a wage earner’s plan) allows individuals to reorganize their debts while still making certain payments. Chapter 13 bankruptcy might be an option for someone who does not wish to lose certain assets. This plan will allow debtors who make a reliable income to pay a certain amount each month that the court will distribute between creditors. At the end of the bankruptcy, the remaining debts dissolve.
There are notable drawbacks to filing for bankruptcy, most importantly being the harsh impact on your credit score for up to ten years. However, for many individuals, this option will allow them to move forward with a healthier financial situation.
Settling debts is different from bankruptcy because you and a representative all attempt to negotiate with creditors to reduce your debt balance. If you have significant cash reserves to pay off debt, you might offer to pay a percentage of outstanding debt and eliminate the remaining balance.
Unlike bankruptcy, when you attempt debt settlement, creditors can still aggressively pursue the money you owe. Additionally, debt settlement will also impact your credit score. Debt settlement can also have tax implications as the IRS considers discharged debt to be a form of income.
If you can settle your debts, this option might be a good one if you do not want to have bankruptcy on your record or you cannot otherwise qualify for bankruptcy. However, many individuals who wish to pursue debt settlement might be better off filing for bankruptcy.
Hiring A Tulsa Attorney In A Bankruptcy Case
If you are facing significant financial debt, you will need to consider your options for taking control of your finances. An experienced bankruptcy attorney could help you determine whether bankruptcy or another form of debt relief is the right way to go. For more insights on whether bankruptcy is right for you, touch base with the bankruptcy lawyers at Kania Law Office by calling (918) 743-2233 or by contacting us online.