Many Notable People Have Declared Bankruptcy Also

Category: Finance, Credit.

How can you legally get rid of debt?

America s first leaders drafted bankruptcy into the Constitution. The answer is complicated but if you know the system you can legally eliminate debt once and for all. When setting up the court structure for the United States, they specified only a supreme court and a series of bankruptcy courts. Many notable people have declared bankruptcy also. Did you know, Thomas Jefferson declared bankruptcy twice. Henry Ford, Mark Twain and Lynn Redgrave have all declared bankruptcy. Let s first explore two less extreme options.

Declaring bankruptcy is just one option for individuals with debt problems. One option is to consolidate your debt. You should be able to secure this loan at a lower interest rate than you had when your debts were freestanding. When you legally eliminate your debt through consolidation, you package your responsibilities into one loan package. Now you pay just one fixed bill. Some people are in so far over your head that you can t make the payments on your outstanding debt. If you have gone through a formal debt consolidation program, you will make the monthly payment to your consolidator who will turn around and make the payments to all of the individual creditors.

Simply lowering the interest rate won t help. Sometimes you can reduce your loans by up to 50 percent. That is when you need to arrange with your creditors for a reduction of the obligation. Why would creditors comply? And, they d rather get partial payment than none at all. Well, they re afraid that if they don t work with you, you ll choose the next option which is bankruptcy. But sometimes bankruptcy is the premier option for you.

Ironically, many people find their credit scores actually increase after bankruptcy because so much bad debt is eliminated. Although it has some harmful consequences, particularly on your credit report and credit score, a Chapter 7 bankruptcy literally absolves you of all of your debt. Each year, about one percent of American households declare bankruptcy. S. households would benefit from a bankruptcy filing. But Professor Michelle White of the University of Michigan believes that 17 percent of U. You can legally eliminate debt.

You will be in a stronger position once you solve your credit, and financial problems, debt.

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Vital personal information such as where you live, your place of employment, your bill paying methods, and whether you ve ever been arrested or declared bankruptcy is all contained within your credit report. Your credit score is used by lenders to determine interest rates for mortgages and other loans.