Do you get out of all debts if you declare bankruptcy?

Do you get out of all debts if you declare bankruptcy?

Disclaimer – We are not lawyers and we are not giving legal advice. These are merely some bankruptcy options and information. Consult an attorney who specializes in bankruptcy law BEFORE you do anything.

Do You Get Out of All Debts If You Declare Bankruptcy?

Bankruptcy gets tossed around like a get-out-of-jail-free card. Many people think that bankruptcy is the answer to any financial difficulty and it is an easy out. In reality, bankruptcy is expensive, complicated, and may not erase all or even most of your debts. You’ll also affect your credit rating and history usually for up to ten years.

If you think you are on the brink of bankruptcy, let’s take a look a what bankruptcy can and can’t do for you. We’ll also answer “Can you file bankruptcy on medical bills and credit cards?”

Speak to one of our Debt Experts today for more information.

What is Bankruptcy?

Bankruptcy is a legal action ordered by a court of law. You file a petition in court to seek relief from some or all of your debts. Depending on the exact type of bankruptcy, you will either be released from existing debt or have your debt restructured for repayment. It gives you a chance to start over.

Bankruptcy does come with some problems. It is expensive and complicated. Your credit will take a hit for up to 10 years. There is a social stigma associated with filing.

Find out more information on bankruptcy alternatives.

Different Types of Bankruptcy

There are several types of bankruptcy. There are four bankruptcies that deal specifically with individuals.

  • Chapter 7 is designed for individuals under a certain financial level
  • Chapter 11 includes both individuals and businesses
  • Chapter 12 is mainly for family-based farms or fish operations
  • Chapter 13 is for individuals with assets and income but who need their debt restructured

Most people are interested in a Chapter 7 or 13 bankruptcy, so we will focus on these in this article.

Click here to read The Top 10 Most Common Bankruptcy Questions.

How Much Debt Do I Need to File Chapter 7?

How much debt you need to file Chapter 7 depends on your state’s median income. If you decide to file Chapter 7, you will compare your income to your state’s median income. If you make less than the state median, you can then proceed with the next step, a means test. If you make more than your state median income, you may be able to proceed based on the results of the means test. This allows people in areas with high housing costs and other similar factors to file for bankruptcy.

Your next step is to file a means test – subtract the average of the last six months of specific monthly expenses from your current (average of last 6 months) monthly income. This gives you your monthly disposable income. The higher this number is, the less likely it is that you will be able to file Chapter 7.

Disclaimer – Make sure you consult with a bankruptcy attorney in your state of residence before making any decisions.

How Much Debt Do I Need to File Chapter 13?

Chapter 13 is slightly different from Chapter 7. If you have a regular income, you will have a plan to repay all or most of your debt. At time of writing, you must have unsecured debts less than $394,725 and secured debts less than $1,184,200.

Chapter 13 bankruptcy doesn’t require a means test. Instead, the court will look at your income to determine how long your repayment plan will last. If you make less than your state median income, you will usually repay your debts in three years. If you make more, you will repay your debts over five years, thus repaying more of your debt. During your repayment plan, creditors are forbidden to start or continue collection efforts.

Chapter 13 allows you to save your home. You must make all mortgage payments during your repayment period and you may make up delinquent payments during this time.

What Paperwork Do I Need To File a Bankruptcy?

When you file, you will need to provide:

  • Lists of assets and liabilities including all property
  • Current income and expenditures including monthly living expenses
  • A list of all creditors, amounts and type of claims (executory contracts and unexpired leases)
  • A statement of financial affairs including employer payments received 60 days before filing
  • A statement of monthly net income including source, amount, and frequency of the income, and any anticipated increase in income or expenses
  • A copy of the most recent tax return and any tax returns filed during the case
  • Provide a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling
  • Any interest in qualified education or tuition accounts

If you are married, you must provide the same for your spouse, regardless if only one person is filing.

Of course, there are specific forms that needs to be filled out. Your state’s bankruptcy court clerk will have a list of all the required forms plus any forms that are particular to your state. You may be able to fill them out online but will need to print them to be filed.

What Happens Once You File for Bankruptcy?

Once you file for bankruptcy, several events will occur. The court will declare a stay on legal actions against you. It stops creditor collection activities such as telephone calls, wage garnishments, and lawsuits (with some exceptions).

Filing temporarily stops repossession and foreclosure or eviction. If the account is still in arrears when the stay is lifted, you will lose the house or car in question. Eviction is subject to state laws and may or may not be stayed.

Once the court approves your bankruptcy, you will have some debts erased or you will have a repayment plan to complete. It generally takes three to four months to work your way through bankruptcy court.

Does Bankruptcy Clear Debt?

Bankruptcy generally clears unsecured debt such as medical and credit card debt. In fact, medical expenses are one of the three most common reasons that people file bankruptcy. The other two reasons are job loss and divorce.

Debts that are cleared include:

  • Credit card balances
  • Medical bills
  • Personal loans
  • Utility debt
  • Gym contracts
  • Other unsecured debts

Bankruptcy does NOT clear:

  • Student loans under most circumstances
  • Child support
  • Alimony
  • Purchases on a secured credit card issued by a jewelry, furniture, or electronics store – these purchases must be returned
  • Debts not listed in your bankruptcy papers
  • Debts for personal injury or death due to intoxicated driving
  • Fines and penalties for legal action such as traffic tickets and criminal restitution
  • Debt related to fraud, depending on the court order

Can You File Bankruptcy Twice?

Yes, you can file for bankruptcy more than once. However, you must wait 8 years to the day between the date of the first discharge and filing the second bankruptcy.

When to Declare Bankruptcy

Filing for bankruptcy is a last resort. Before you file for bankruptcy, contact Pacific Debt, Inc. We may be able to help you get out of debt without the long-term damage to your credit report and the social stigma.

If bankruptcy is your only option, we highly recommend you seek legal advice. Filing is straightforward but requires a great deal of paperwork and deadlines. Legal representation can smooth your path. Speak to an attorney in your state.

Pacific Debt, Inc

Pacific Debt, Inc. is a debt settlement company that works with your creditors to decrease the total amount that you owe. Your individual counselor will work with you to set up a repayment plan to discharge your debts typically within 24 to 48 months.

There are some downsides. Your credit will be affected up to seven years, as compared to up to ten years for bankruptcy. You may still receive phone calls from creditors, but many creditors are willing to take something as opposed to nothing and will work with you.

Before you decide to file bankruptcy, take the time to consult with one of our counselors. You may be glad you did.

For more information, contact one of our debt specialists today. The initial consultation is free and our debt specialists will give you all your options.

How to deal with debt collectors when you can't pay

How to Deal With Debt Collectors When You Can’t Pay

If one of your debts has gone to collections, you will hear all sorts of things from the person on the other end of phone call. Not everything they are telling you is true. Here is what happens if you don’t pay a collection agency and some of your options to end the constant calls. Find out how to deal with debt collectors when you can’t pay them.


Ending Up at Debt Collection

If you can’t pay debt collector payments for the last three to six months, the creditor may sell your debt to a collection agency. At that point, you no longer deal with that original creditor and your credit report will note that you have been sent to collections.

You still owe the entire amount. If you absolutely can’t repay the entire amount, the debt collection agency would rather collect some money than nothing. This may allow you to negotiate a deal.

Will it hurt your credit to negotiate? Yes, but so will defaulting on a debt.

Chat with one of our debt experts today to find out more about our debt relief program.

What to Expect If You Don’t Pay Debt Collections

If you can’t pay a debt collector, the following may happen:

  • You’ll be reported to credit bureaus, damaging your credit and ability to get loans
  • Someone will write or call you regularly
  • Assets may be repossessed or a lien placed on it – home, car, rent-to-own items, etc.
  • You may be sued – always respond!
  • You may be reported as in default or delinquent
  • You may end up at a different collections agency

How to deal with debt collectors when you can't pay article

Working with A Collection Agency or Debt Collector

The first and most important thing to know is that you have federally guaranteed rights and many states have similar rights. Here is what a debt collector cannot do under the Fair Debt Collection Practices Act (FDCPA):

  • Contact you between 9 p.m. and 8 a.m. without your permission
  • Threaten violence or using profanities when speaking to you
  • Contact third parties (family, friends and employers) about your debt or otherwise embarrass you
  • Speak to your employer except under limited conditions
  • Pretend to be a government official or an attorney
  • Send letters that look like attorney or governmental letters but that are not
  • Send derogatory messages about you to a credit reporting agency
  • Send information on a postcard or via social media
  • Attempt to collect an expired debt
  • Hire an unlicensed credit collection agency
  • Communicate with you if you are represented by an attorney

There are a few things that you SHOULD NOT do:

  • Make a good faith payment. This payment can restart the expiration clock
  • Be rude to a collector. It can work against you if the phone calls are replayed in court
  • Let your contact information get out-of-date (the debt collection agency can contact third parties to track you down)
  • Admit that it is your debt or promise to pay – it can be construed as a contract
  • Give out financial information like your social security number or the value of a property

There are things you SHOULD do:

  • Take notes when you speak to a debt collector. Write down date and time, debt collector name, which debt, and what the debt collector says
  • Keep all mail, copies of texts, etc
  • Tell the collector if you legitimately can’t pay. They may try to work with you
  • Tell the collector if the debt is not correct
  • Give them your current contact information
  • Consider telling the collector to stop contacting you. If you want to work towards a settlement, you may not want to take this step

Speak to one of our debt experts right away to find out more information

What Steps Can You Take Once in Collections?

There are several options to get a debt collector to go away.

Ignore the debt and calls. You may end up in court or the collectors may give up. This is not a good option.

Set up monthly payments – Because the debt collector bought the debt for less than it is worth, they may be willing to negotiate. If you want to try this, offer to pay 40 to 50% of the total amount. Make sure the get the following in writing:

  • The amount you agree to repay and what you are repaying – are you paying against what you owe or settling the bill once you pay
  • The name of the debt – make sure you are paying off what they think you are paying off.
  • The collection agency should have the name of the original creditor and account number.
  • The exact day the payment is due.
  • The exact name of the collection agency since debt can be sold
  • The effect on the account after payment. Will it be reported to a credit agency, etc.

Debt consolidation requires you to take out a loan to pay the original debt. It may not be possible to get a loan if you are in collections.

Debt management includes working with a credit counseling agency to learn to better manage money and pay off debts

Bankruptcy is a last resort to handle your bills. It is expensive and you need legal advice and representation.

Debt settlement includes signing up with a debt settlement company like Pacific Debt, Inc. If you qualify, a debt settlement company with negotiating with your debtors while you build a fund to begin repaying debts. You can also do this on your own, but it takes determination.

Pacific Debt, Inc.

Pacific Debt, Inc can help you deal with debt collectors when you can’t pay and even offers a free consultation. Our debt specialists will perform an in-depth analysis of your debt and advise you on your options. They ensure that you understand all options and all the program details.

Depending on your financial situation, Pacific Debt, Inc works with you to have you debt free in one to two years. We do not make money unless your debt relief program works for you. You have nothing to lose and every to gain by contacting Pacific Debt for your free consultation.

For more information, talk with one of our debt specialists today.


Should you file bankruptcy because you cant pay your credit card bills?

Should You File Bankruptcy Because You Can’t Pay Your Credit Card Bills?

Americans collectively have $1 trillion in revolving debt balances – most of that is credit card debt. If you are one of the millions of Americans with credit card debt, know that you are not alone. It might not help, but misery does love company!

If you are having trouble paying your credit card bills, you are probably looking for a solution. Bankruptcy might seem like a great option. You might get your debt wiped out and be able to start over again.

Before you decide on bankruptcy, check out your options very carefully. Bankruptcy has some serious consequences.

Is Bankruptcy an Option?

There are two forms of consumer bankruptcy. Chapter 7 is designed for people who absolutely can not pay their bills. You must pass a means test and earn under your state median income for your family size. Chapter 13 is for people with a steady source of income and specific amounts of unsecured and secured debt.

For some people, bankruptcy is the only option. If you owe more than you can realistically pay off, you may need to seriously consider bankruptcy.

Bankruptcy can provide immediate debt relief and puts an immediate stop to the harassment. In some cases, all of the unsecured debt is forgiven, and you get a “clean slate.”

Pros of Bankruptcy

  • Stops Bill Collections – No more collection calls and letters.
  • Eliminates Credit Card Debt – Depending on the BK you file, all your debts could get wiped away.
  • Allows the opportunity to start rebuilding your credit – Enjoy a fresh financial start!

Cons of Bankruptcy

  • Damaging to your Credit – Your credit rating takes a hit after you file a bankruptcy. It stays on your credit report for 7-10 years depending on the type of bankruptcy that was filed.
  • Cost of Filing and Lawyers – Bankruptcy can be expensive. There are filing fees, and lawyers can cost thousands of dollars. Make sure to check all your options carefully.
  • Physical and Mental Drain – Until your bankruptcy is finalized, you’ll still get creditors’ harassing phone calls and threatening legal letters. Many people agonize over the stigma of bankruptcy.
  • New Credit and Loans – Your credit will probably take a severe hit. You will, at some point, need to start rebuilding your credit. It’s very difficult to get approved for new loans with a bankruptcy on your credit history.

If bankruptcy appears to be your only option, you may be a candidate for debt settlement. Pacific Debt may be able to help you avoid bankruptcy while getting out of debt.

For more information on debt settlement, talk with one of our debt professionals.


Is Debt Settlement a better option than Bankruptcy?

Debt settlement is a last resort to filing a bankruptcy. First, what is debt settlement? In debt settlement, you negotiate with your creditor to agree on a reduced balance. Pacific Debt is one of the leading debt settlement companies in the United States. We will negotiate with your creditors while helping you learn to live debt free.

Pacific Debt can help you if:

  • Have more than $10,000 in unsecured debt (generally credit card debt)
  • Live in a state where we do business
  • You are having difficulties making minimum payments

Pacific Debt is not for you if:

  • You want ONLY to improve your credit score
  • You ONLY want lower interest rates
  • You can make more than minimum payments and have a good credit score

Is debt settlement a better option than bankruptcy? It depends on your unique situation but here are some points to take into consideration.

  • Do you only make minimum payments on your credit cards?
  • Do you use credit cards to pay for necessities?
  • Are you using one credit card to pay off another?
  • Are bill collectors calling or creditors suing you?
  • Are you in danger of foreclosure?
  • Are you thinking of withdrawing 401K monies to pay your debt?
  • Have you lost your job?
  • Do you have a lot of medical bills?
  • Are you getting a divorce?

If you answer yes to any of these, you may be a candidate for debt settlement.

For more information on debt settlement,
talk with one of our debt professionals.

Who Can Help me with Debt Settlement?

Pacific Debt is a Debt Relief Provider with over 15 years of experience. Pacific Debt offers debt relief solutions tailored to your unique situation and budget. Our certified counselors help you work up a budget and  explain your options to you

  • Accredited by the Better Business Bureau with an A+ Rating
  • Rated 4.5/5 stars by (over 450 verified reviews)
  • Rated 5/5 stars by TrustPilot based (over 400 verified consumer reviews)
  • US News and Report  – named Pacific Debt as One of the Best Debt Settlement Companies of 2018

Pacific Debt has helped thousands of people reduce their debt. We have settled over $250 million in debt for our clients since 2002. Contact us to see how we can help you.

How do I get started and how long will it take?

Once you make the decision to get out of debt, you apply through our website. You’ll be connected with a certified debt relief specialist who will review all your options. If debt settlement is right for you, we move forward on getting you enrolled.

If it is not, we refer you to one of our Trusted Partners who can help you with other options.

As you enter our debt settlement program, your certified debt relief counselor will analyze your debt, monthly expenses, and your income. They look at your current budget and determine a payment estimate that works for you. They then work with your creditors to agree on a lesser amount of debt and a repayment schedule. An Account Manager will be with you every step of the way.

For more information, talk with one of our debt specialists today.


Disclaimer: We are not lawyers and are not giving legal advice. We strongly recommend speaking to a professional before making any decisions.


Financially Stable Couples How to Manage Marriage and Finances

Financially Stable Couples: How to Manage Marriage and Finances

Few things are as painful or frightening to a child as parents fighting.

And few things are more destructive to marriages as financial troubles. According to Ramsey Solutions, the only thing that causes divorce more than money is infidelity.

So, how do you resolve the issue between marriage and finance? The obvious answer is to establish financial goals and live frugally. But, sometimes, the obvious answer isn’t the cure-all.

No doubt financial wellness will ease the strain on marriages, but financial wellness doesn’t guarantee happy marriages. And sometimes, the strain on your marriage goes deeper than money itself.

Luckily, there are some great ways to heal relationships damaged by financial strain, as well as ways to avoid financial strain altogether.

Take a look at these tips for handling marriage and finance woes:

How Does Money Affect Relationships

According to Dr. Kathleen Hall from Sharecare, “the first wound in a relationship usually involves finances.” This cause of marital wounds becomes more understandable when you realize that almost two-thirds of all newlyweds start off in debt.

On the other hand, money troubles don’t guarantee a divorce. In fact, couples who have great relationships also discuss money with their spouse. Another finding from the Ramsey Solutions study points out that “Ninety-four percent of respondents who say that have a “great” marriage discuss their money dreams with their spouse.”

Talking about money with your spouse doesn’t always have to be a fight. Dr. Hall adds that “money can be a source of destruction or a source of creativity in a marriage.”

So before you write off your marriage when financial hardship hits, make a promise to yourself and to your spouse that you will use your financial struggles as stepping stone to a stronger relationship.

How to Deal with Financial Stress as a Family

The first rule of surviving financial stress as a family is to know the value of family compared to the value of money.

If you think of finances and family in terms of investment, people generally invest much more time and willpower into money than they do family.

Think about it, at least 8 hours of every day are spent working and 8 hours are spent sleeping. Be honest with yourself, do you invest nearly as much time in your family as you do your money?

Of course, measuring your investment in money and family isn’t really fair — most people are trying to make money in order to support their family. But, we need the perspective that comes from believing we owe something more than money to our families.

This mindset teaches us one important thing that we should always remember: creating a strong family requires an active, daily investment of time and attention.

Contact Pacific Debt today to get your FREE Consultation.

Here are some great ideas for dealing with financial stress in marriage:

  • Family Night

    Set apart time to spend with your family. Make it a weekly habit. Family nights help families grow stronger and happier. Family nights are a great time to play games together. In general, playing games as a family is highly beneficial for both children and adults.

    For example, U.S. News revealed that playing helps people learn to be friends, learn difficult subjects, learn to cooperate and play fair, and improves all areas of life. Family night is also a great time to learn how to cope with difficult circumstances, such as financial troubles.

  • Family Dinner

    Eating together has shown to drastically improve the mental and physical health of children.

    Most notably, a report from The Atlantic showed that “children who do eat dinner with their parents five or more days a week have less trouble with drugs and alcohol, eat healthier, show better academic performance, and report being closer with their parents.”

  • Set Family Financial Goals

    Your kids should learn the basic principles of handling their finances while they’re young. You never know, you may pick up a few financial tips yourself while training your kids to be financially independent.

    If your kids ever get the urge to put up a lemonade stand, teach them to save and budget the money they make. Did you know that your kids could actually owe taxes from small entrepreneurial efforts? While this may be annoying, it does provide a great opportunity to learn and grow as a family.

  • Get a Jumpstart on Taxes

    The peak of financial stress for many couples is tax season. To prevent any marital duress due to financial stress, make sure you prepare your taxes well before the tax deadline.

    If you’re putting off your taxes for one reason or another (especially if you owe back taxes), it’s even more important that you get your taxes in order. The added weight of an IRS audit is enough to push any family to the breaking point.

  • Backyard Campouts

    Camping with children is stressful and tedious — like every other activity done with children. Fortunately, backyard camping is all the rage and has actually proven to be a great bonding experience for many families.

    Backyard camping eliminates the hassle of long trips into the mountains and keeps you within arms reach of the comforts of home; it also allows you to sit around a campfire as a family, tell stories, play games, and grow closer than you would by staying indoors.

How to Manage Finances in a Marriage

Most individuals have some sort of personal financial plan before getting married (no matter how poor the plan actually is). Once two people get married, these personal financial plans hardly ever work anymore. There are added expenses, additional debt, and new streams of income.

It’s important that you revise your financial plan once you get married. Luckily, there are many things you can do to handle your joint finances in marriage.

The first step for most couples will be to find a great budgeting app. The best budgeting apps will allow you to track your income, prioritize your spending, and create a budget that fits your unique financial situation.

Another option that many couples find helpful is the combination of debt and finances. If you do decide to combine, take advantage of zero percent interest on balance transfers from select credit card companies.

You may also consider using a debt resolution company to get your combined finances in order.

Other successful couples choose to separate their finances, though this is a much riskier path, in terms of marital success. Combining finances can mean greater financial risk, especially if they file joint tax returns (many people have been held responsible for mistakes/inaccuracies on their spouse’s tax return).

Remember that good marriages lie upon a foundation of teamwork and trust — this is still possible while keeping finances separate, but it is tricky.

Make sure you offer your help and support to your spouse when they are experiencing financial difficulties. You may even consider paying a bit more than your share on the monthly bills every once in a while. It may also be smart to put off a joint bank account until after your individual debts are paid off.

No matter your preferred method a managing finances, make sure you follow the three rules of marital financial success: communication, trust, and self-sacrifice.

Our Debt Specialists can help you explore your alternatives to bankruptcy, including debt consolidation and debt settlement options.



We are not lawyers and are not giving legal advice. We strongly recommend speaking to a professional attorney.

What is Bankruptcy featured image

Top 10 Most Common Bankruptcy Questions

Below is a list of the Top 10 Most Common Bankruptcy Questions. Please take the time to read through it as you may find it useful. DISCLAIMER: We are not lawyers and are not giving legal advice. Before filing bankruptcy, talk to a lawyer in your location.

1) Does Bankruptcy Clear Debt?

In general, bankruptcy clears out most unsecured debt. Unsecured means the loan is not backed up by a guarantor or asset. Unsecured debt can include medical bills, overdue utility payments, credit cards, personal loans, and certain contracts, like gym memberships. Secured debt includes purchases on a secured credit card and large purchases like homes and cars.

Federal student loans are unsecured but typically cannot be wiped out in bankruptcy. Child support, alimony, and most tax debt are also not included.

2) How Much Debt is Needed to File Bankruptcy?

For Chapter 7, there is no minimum amount of debt. It depends on your individual situation. The court will look at whether you are able to repay debt outside bankruptcy, if creditors are willing to work out a repayment agreement, and what types of debt you have.

For Chapter 13, you can not have more than $1,184,200 in secured debt or $394,725 in unsecured debt. These numbers are adjusted periodically.

3) Should I Declare Bankruptcy or Seek Debt Settlement?

This depends on your specific case. In debt settlement, you and your creditors agree on a lesser amount to be paid than what is owed. Bankruptcy erases most of your debt depending on what type of debt it is, and which bankruptcy you filed. Bankruptcy can also be very expensive, largely due to the legal fees. Not to mention, there is a pretty bad stigma that comes along with it that nobody wants to be associated with.

Both methods may negatively impact your credit score. Debt settlement is not a public record but missed payments could stay on your credit report up to seven years, while a bankruptcy is public record and can show up to 10 years. With debt settlement, you may be required to stop making credit card payments before the creditor will consider working with you. Once you have paid off the agreed upon (settled) amount, your credit report will show the account was paid off, but for less than what was originally due. As you pay off your debts and use any new credit carefully, your credit score should start to improve. Rebuilding your credit rating takes both the careful use of credit and on-time payments. With care, you could start to see improvements in a fairly short period of time.

Pacific Debt offers a FREE Consultation to anyone looking at debt settlement options. Our Debt Relief Program is designed to try to get you out of debt in two to four years.

4) How Often Can You File Bankruptcy?

As a general rule:

Chapter 7 then Chapter 7 –  You must wait eight years from the date you filed the first case.

Chapter 13 then Chapter 13 – You can’t get another discharge for two years, but you can file a second as soon as the first case is closed.

Chapter 7 then Chapter 13 – Commonly referred to as a Chapter 20 bankruptcy. You must wait a minimum of four years.

Chapter 13 then Chapter 7 – You must wait up to six years from first filing date unless you have paid off all unsecured debts or made a “best effort” to repay at least 70%.

For more information on how often you can file a bankruptcy or more information on the bankruptcy basics, check out National Bankruptcy.

5) What Happens When You File Bankruptcy?

In a Chapter 7 bankruptcy, your previous debts are usually wiped out, along with your good credit history. You have the opportunity to rebuild your credit. In Chapter 13, you repay your debts for a reduced amount over four to six years. In both cases, the bankruptcy will stay on your credit report for up to ten years.

6) Can You File Bankruptcy on Medical Bills?

Medical bills are considered unsecured debt and can be easily wiped out in most cases. In a Chapter 7 bankruptcy, you must first pass a means test. There Is no limit to the amount of medical debt.

In a Chapter 13 bankruptcy, your debt can’t exceed the debt limits. You repay the bills based on income and expenses, but usually not the full amount.

7) How Long Does a Bankruptcy Stay on a Credit Report?

A bankruptcy can stay on your credit report for up to ten years.

8) Can I be Approved for Credit Cards After Bankruptcy?

Yes. Depending on the credit card company, you may apply for both secured and unsecured cards. With a secured card, you must have a certain amount of money on hold with the credit card company to ensure the bill will be paid. You may have to meet fairly stringent requirements to apply for an unsecured credit card.

Are you wondering how much money you are spending on credit card interest? Our credit card calculator can help you figure out exactly how much money you’re paying on interest and principal each year.

9) Is Buying a House After Bankruptcy Possible?

Yes, within certain guidelines. After Chapter 7, you must wait two years for an FHA or VA loan, and four years for a conventional loan. After Chapter 13, the wait time is roughly halved. Often, you will have to show a 12-month consecutive record of on-time payments and have the court’s permission.

Check out our recently published article on How to buy a house with bad credit.

10) How Long Does It Take to File Bankruptcy?

It takes roughly three to six months to file and receive a discharge. In Chapter 13, the repayment time may take three to five years to finish paying existing debts.

Our Debt Specialists can help you explore your alternatives to bankruptcy, including debt consolidation and debt settlement options.


Disclaimer – We are not lawyers and we are not giving legal advice. These are merely some bankruptcy options and information. Consult an attorney who specializes in bankruptcy law BEFORE you do anything.

5 ways to get debt relief from credit cards

5 Ways to Get Debt Relief from Credit Cards

Credit card debt is a problem for many Americans. For many people keeping up with monthly credit card payments is increasingly difficult. Causes vary. An illness, job loss, low income, or poor spending habits may be at the root. Spending more than you earn is very easy to do, especially with the convenience of a credit card.

If you cannot make your monthly credit card payments, act immediately! It’s easy to get caught up in increasing debt. You may not be able to break free without the help of a debt relief professional.

What types of debt relief help are available? We’ll discuss some options that may help you pay off debt. Hopefully, you can use these options to pay off your debt and start enjoying a debt free life.

What is Debt Relief?

Debt relief can come in the form of debt settlement which is the ability to negotiate or settle, your loan amount with the creditor. You may be able to lower the interest rate or even eliminate your entire debt.

Your situation is unique, and no one method fits everyone. Explore your options carefully and pick the one that makes the most sense for your situation.

Get a Free Consultation and find out how our Debt Settlement Program can start helping you live a debt free life today!

What Are My Debt Relief Options?

  1. Make Your Monthly Payments – Use our Credit Card Interest Rate Calculator to see exactly how much you’ll be paying on interest and principal.
  2. Debt Settlement – negotiate a lower balance on your debt amount
  3. Debt Consolidation – taking out a loan to pay off other debts
  4. Debt Management – working with a credit counseling agency
  5. Bankruptcy – a legal remedy to settling out of debt. Make sure to consult a lawyer in your area for more information

The last four options come with credit consequences on your Fico score. However, not paying your debt on time may also result in negative credit consequences. The biggest benefit of paying off your debt is that you will be able to rebuild your credit later. You can improve your credit score with effort and learn better money management skills.   

There are several types of debt that cannot be eliminated or settled. These include child support, student loans, and other secure loans.

What Do Debt Relief Companies Do?

Debt relief companies negotiate on your behalf with your creditors to help settle your debts. The debt specialists have worked with thousands of creditors. They know which creditors are willing to work out solutions and which are completely unwilling to settle.

Debt specialists know state and federal laws that govern lawsuits, collections, and statutes of limitation. Your debt specialist will guide you through each step of the process. The credit repair program takes two to four years and you’ll be in contact with your debt specialist at least once a month.

Once your debt is relieved, a reputable credit repair company will help you repair your credit rating. A good credit score makes it easier to buy a car, get a mortgage or even get better rates on credit cards and loans.

Steps Debt Relief Companies Take

  1. Your debt specialist will access your free annual credit report from Equifax, TransUnion, and Experian. You are entitled to one report each year, but they can be confusing. A debt specialist will guide you through the report.
  2. A debt specialist will go through your budget with you to see how much you can afford to pay each month
  3. Your debt specialist will work with your creditors to help settle your debts. They may be able to lower interest rates, settle on a lower amount, or even get the entire debt erased.

Who’s the Best Debt Relief Company For Me?

Pacific Debt, Inc has an excellent track record with credit repair. In business since 2002, they are in downtown San Diego. Pacific Debt has earned an A+ rating from the Better Business Bureau and is a BBB Accredited Business. They have settled over $200 million dollars in consumer debt. ranks them as one of the best debt settlement companies.

Pacific Debt offers a free consultation. Their debt specialists will perform an in-depth analysis of your debt and advise you on your options. They ensure that you understand all options and all the program details. Depending on your financial situation, Pacific Debt works with you to be debt free in one to two years. The company does not make money unless your debt relief program works for you. You have nothing to lose and every to gain by contacting Pacific Debt for your free consultation.

Read real reviews from people who have used Pacific Debt to settle their credit.

A Certified Debt Counselor can help you from drowning in debt!


Debt Settlement vs Bankruptcy

debt settlement pan to avoid bankruptcy

Debt Settlement vs Bankruptcy

Weighing The Pros and Cons

One of the most common things we hear from consumers is that they want to look into a debt settlement plan so they can avoid filing for bankruptcy. In many cases, a debt settlement strategy can be a great way to avoid bankruptcy. Sometimes, however, bankruptcy might actually be the best option. When looking for the best way out of debt it is important to compare Debt Settlement vs Bankruptcy and go with the solution that makes the most sense for your specific financial situation.

Since all consumer situations are unique and the bankruptcy laws in many states are different, you will need to meet with a bankruptcy attorney that is licensed in your state in order to gain a complete understanding of what a bankruptcy filing would look like for you.

Bankruptcy Ch. 7

Filing a Ch. 7 bankruptcy is basically like wiping the slate clean, discharging all your debts and starting over. It typically only lasts a few months and provides for the most immediate form of debt relief than any other option.

The bankruptcy can stay on your credit report for up to 10 years, but you should be able to rebuild your credit to the point where you can borrow money for consumer items within a few years. Bankruptcy reform laws passed in 2005 have made it harder for many consumers to qualify for a Ch. 7 however.

Now, depending on your income and your assets, if you file for bankruptcy you may not be eligible to file for a Ch. 7 and would be required to file a Ch. 13 instead. Since all states are different you will need to speak with a bankruptcy attorney about which chapter would be appropriate for you.

Bankruptcy Ch. 13

A Ch. 13 bankruptcy is a much different animal than a Ch. 7. With a Ch. 13 you will be on a repayment plan for the next 3 to 5 years and might even be required to pay your entire debt in full. The goal of the Ch. 13 is to protect you from creditors but put a repayment plan in place that will pay back as much of the debt as possible.

Ch. 13 plans typically have a high rate of default among consumers because the monthly payments that they are required to pay can be very high. Many consumers compare Ch. 13 bankruptcy plans to getting an allowance as a kid. Over the 3 to 5 year plan, you are told what you can afford, what you can’t, and how much of your money you have to live on. If you get a raise at work, that must be reported, and the bankruptcy court will decide if you get to keep any of that extra money or if it all must go to your creditors.

Except in rare circumstances, a Ch. 13 bankruptcy is one of the least desirable debt relief solutions.

Debt Settlement

If you can’t qualify for a Ch.7 bankruptcy or would prefer to pay back at least some of what you owe based on your ability, a debt settlement approach is a great strategy to consider. Debt settlement allows you the ability to negotiate with your creditors for a lower principle pay off amount.

Since you must be behind on your debts before your creditors will agree to accept a reduced payoff, a settlement does have a negative effect on your credit, although, in many cases, the credit report will not be damaged as long as with a bankruptcy.

Debt settlement strategies work best for consumers who want to avoid bankruptcy or at least want to try and pay back some of their debt on flexible terms without just walking away from it.  Having access to a reserve lump sum amount of money like a 401k or some other savings would be helpful, but isn’t necessary to successfully settle your debts.

As mentioned above, every consumer situation is unique and the best way to compare a Bankruptcy vs Debt Settlement is to contact a professional to review your situation and help you determine how either strategy may or may not work well for you.

To learn more about debt settlement, contact the professionals at Pacific Debt for a free Debt Reduction Estimate. Once we teach you about the settlement process, you can speak with a bankruptcy attorney and know for certain which option would be the best for you.

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