One solution may be to file for bankruptcy. In America, the leading cause for filing bankruptcy is medical expenses. If you have outstanding medical bills that you are trying to pay but can’t keep up with, bankruptcy may be the right answer.

The United States requires you to take a credit counseling program prior to filing. You will sit down with someone who will see if there is any way to help improve your management of funds and reduce payments to your bills. This is not a consolidation service, whereby your bills all become one payment. This is a service that determines whether you qualify for bankruptcy. If the credit counselor cannot see a way to repay your debts that is a very good indication that bankruptcy may be the right solution for you.

Qualified bankruptcy attorneys will take a look at your finances and all of your outstanding debts. They will require you to go a period of six months without using your credit cards, which may further hurt your financial situation. They will also require a filing fee and a payment for handling your case. The attorney will look at all your outstanding unsecured and service debts and work to have them either reduced, settled or dismissed. This process can take a year or longer to resolve. During this time, you will still be trying to make payments on the bills that your lawyer say you need to, such as your mortgage.

There are two different types of bankruptcy: Chapter 7 and Chapter 13. Any individual or business can file for Chapter 7 but they must pass the “means test” to qualify for this from of debt relief. The means test is a calculation that compares your income to your expenses. Chapter 7 is a total liquidation form of bankruptcy where all of one’s possessions, except those exempt by law, are sold by a bankruptcy trustee. Unlike Chapter 7 where both individuals and corporations can file, business cannot file for Chapter 13 bankruptcy. Also, instead of selling all of one’s assets, a Chapter 13 bankruptcy is an arrangement to repay either all of your debt or a portion of it. Therefore, in order to qualify for Chapter 13 you must have a regular source of income.

When you come out of bankruptcy, you will have a settlement that you will have to pay until it is satisfied. You also will not be eligible to file bankruptcy again for a period of time and your credit score will be negatively impacted for the next 10 years. Choosing a professional to assist you with this decision is the wisest choice you can make. The experts atVivix Credit Solutions provide free consultation where they can put you in touch with the right attorney to help you file your bankruptcy.

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