It's no secret that many Americans have a problem with credit card debt. Credit card debt in our country soared after the financial crisis of 2008, when families suddenly found themselves strapped for cash. Families had little choice at that point but to turn to their credit cards to cover short term purchases, a move that put many deeply in debt. In fact, in 2008 American credit card debt peaked at $1 trillion, a figure roughly equal to Mexico's entire gross domestic product.
Your credit will take a hit, but bankruptcy is still helpful
When someone chooses to file for bankruptcy, regardless of what kind of filing, their credit score is going to take a hit. It is merely an unavoidable side effect of the process -- and while that may sound disastrous, remember that your credit score can be rebuilt over time.
Using Chapter 13 to circumvent Chapter 7 freeze can really help
Let's say that, four years ago, you were in a really bad spot financially. The amount of debt you were carrying was immense; and your ability to maintain payments was withering away. You had to do something -- so you filed for bankruptcy. Everything went well: your Chapter 7 bankruptcy went off without a hitch. Some of your assets were liquidated to pay off your creditors, and a bulk of your debt was discharged.
Income-based repayment plans underutilized, says study
Have you heard of an income-based repayment plan? Commonly referred to as an IBR, it is unlikely you know about this helpful tool if you're a current or recently graduated student in Seattle.
