Richard J. Shurtz, Attorney at Law

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Telephone: 425-329-3601
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January 2018 Archives

Debt relief choice depends on consumer's income, debt load

Many consumers in Washington state are looking at their finances now that the hectic holiday season is over. For some, the toll was steep, and it may have added to an already precarious debt load problem. Those who have a clear overload of debt and cannot pay even all of the minimum payments due on all accounts, must take some kind of debt relief action. According to experts, there are several debt relief paths to resolving such problems.

Bankruptcy is a strong choice when the debt load is overwhelming

Residents of Washington state, like those in other states, are experiencing a spike in credit card debt. Balances and the gross amount of debt collectively accumulated are now being compared to what existed in 2007, just before the financial collapse and beginning of the recession. These trends may be signs that the country is headed again for trouble with a glut of unpaid debt, which generally also is evidenced by an increase in bankruptcy filings.

Chapter 13 bankruptcy provides a payment plan to get current

Washington state consumers can get a fresh start and relieve the pressure of overwhelming debt by filing and completing a bankruptcy. Chapter 13 bankruptcy gives a consumer the opportunity to pay off debt over a three to five-year period during which the debtor will pay a predesignated monthly installment to a Chapter 13 trustee. As soon as the Chapter 13 is filed, the automatic stay goes into effect and continues to prohibit collections by creditors throughout the bankruptcy.

Bankruptcy does not spell permanent doom for one's credit report

About 500,000 persons file bankruptcy in the United States annually, and Washington state gets its proportionate share of those filings. The main drawback that most observers attribute to bankruptcy is its dismal effect on one's credit rating and scores. The negative impact on credit scores does occur, but the other side of that coin is that credit repair after bankruptcy is possible and attainable with some focused effort.