Richard J. Shurtz, Attorney at Law

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Choosing bankruptcy can open new opportunities in the future

People who find themselves mired in debt do have some resolutions to consider. Consumers who are struggling to manage debt while fearing wage garnishments or other collection actions may benefit from researching how bankruptcy protection might ease their worries. There are a number of Washington families who have benefited from these important financial protection options.

There are three main ways to handle crippling debt. The first is to take no action and slip further into debt which may lead to greater financial harm with wage garnishments, tax levies and other collection activities. The next possibility is working with a credit consolidation company. This option could result in payments stretched over time as well as additional fees collected by the company chosen. While this choice may protect one's privacy, if payments are not manageable over time, the consumer could find themselves further in debt.

A third option is a bankruptcy filing. This option includes both Chapter 7 and Chapter 13 which are the two most common filings for consumers. The first is a straight liquidation, where unsecured debts are typically subject to discharge, though there are some exceptions. A Chapter 13 involves a repayment plan usually limited to five years and must first be approved by the court. Debts that are not subject to liquidation may be more manageable with the financial resources that are now available.

Of the three possibilities, choosing bankruptcy may make the most fiscal sense for many Washington families. Once a bankruptcy has been discharged, then the petitioner can start to rebuild the life that may have once seemed beyond one's abilities to achieve due to crushing consumer debt. There are resources available that are experienced in navigating bankruptcy proceedings and can provide the information necessary to begin the process toward a fresh financial future.

Source: The Huffington Post, "Debt Consolidation or Bankruptcy? Choose Wisely the First Time", David Goehst, Sept. 26, 2014

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