Filing a Utah Chapter 7 bankruptcy can reduce your unsecured debts quicker than a Chapter 13 bankruptcy reorganization plan. Also known as “liquidation bankruptcy,” Chapter 7 permits you to discharge (eliminate) many of your outstanding debts without repaying your creditors. Although every step of this process needs to be approved by a bankruptcy judge, it can take far less time than a reorganization plan that can take up to five years. It also takes less time than other methods of debt relief such as debt negation and debt consolidation.
In fact, filing a Utah Chapter 7 bankruptcy can eliminate the bulk of your unsecured debt load in just a few months. While many who file for Chapter 7 end up losing their homes to foreclosure, you may be able to hold onto your house by entering into an agreement with your mortgage lender and continuing to make payments on it. Even if you aren’t able to do this, the benefit of a clean debt slate may outweigh the inconvenience of losing your home. As you begin to rebuild your credit in the years that follow your bankruptcy, you’ll eventually be able to purchase another home. If your debt situation is clearly unmanageable, filing a Utah Chapter 7 bankruptcy may be your fastest route back to turn you finances around.
A bankruptcy declaration will affect your credit score sometimes for the worse and at times for the better. If it does damage it, it won’t damage it forever. Furthermore, you may have some control over the process’s ultimate outcome. By taking steps to rebuild your credit score after filing bankruptcy, you could find yourself commanding prime interest rates and securing high-limit credit cards within a few years. You’ll simply need to pay off your remaining obligations in a diligent fashion and avoid taking on too many new loans.
The bankruptcy process can also serve as a means for you to reorder your household’s budget on a permanent basis. After you declare bankruptcy, you’ll need to present a repayment plan to the bankruptcy judge as well as your creditors. As part of this plan, you’ll need to provide detailed information about your income and expenses. You will also receive financial management training as part of the new mandatory bankruptcy process. All of this in the long run, this may improve your credit profile and increase your chances of emerging from a Utah Chapter 7 bankruptcy with a manageable load of debt.
In short, filing a Utah Chapter 7 bankruptcy may not lead to financial ruin. In fact there is Life After Bankruptcy. In many circumstances, reorganization can actually be a powerful tool that reduces your unsecured obligations and sets you back on the path to firm financial footing within a few short years. At our Utah County office in Orem we help hundreds get a fresh financial start under Utah chapter 7 bankruptcy.