If you have accumulated a significant amount of debt and are unable to repay your creditors, this situation is likely causing you a tremendous amount of stress. Most people do not take out loans or credit card debt with the intention of not being able to pay, but sometimes in life situations occur that make it impossible to meet debt obligations.
Struggling under the weight of crushing debt is something that many people face. It can be difficult to know what to do or how to resolve the problem. However, the good news is that there are solutions. Here are three examples of routes individuals might take to try to get out of debt and make a fresh financial start in New York.
1. Debt reorganization
In some cases, you may have the means to pay off your debts in a different way that allows you to pay smaller monthly payments and reorganize your debt. One way this may be able to be done is through a Chapter 13 bankruptcy, sometimes called the "wage earner's plan." Chapter 13 is generally for people who have a regular income, and it involves creating a payment plan for all or part of what you owe, typically distributed over three to five years.
2. Chapter 7 bankruptcy
A Chapter 7 bankruptcy is what people might commonly think of when they think of bankruptcy. It is a debt liquidation bankruptcy. This type of bankruptcy can be particularly helpful when you are facing medical debt, credit card debt and other types of unsecured debt. Filing bankruptcy may help you stop harassment from creditors and get started on a fresh financial future.
3. Bankruptcy alternatives
Filing for bankruptcy is not the only way to get out of debt. Some situations warrant alternatives to bankruptcy, such as credit counseling, which may be effective in a situation in which your debt and nonpayment is still at a relatively manageable level. If you are facing creditor harassment, or you do not have a stable income, however, such alternatives may not be workable for you.