For most Long Island residents, a mountain of debt means years of repayments to creditors. But what if the mountain is so big that repayment in one's lifetime becomes virtually impossible? Fortunately, bankruptcy offers a way to level the mountain and start over.
One woman recently shared her thoughts about bankruptcy and how it changed her life. Although declaring insolvency was embarrassing at the time, she believes the move made sense. Despite making regular payments to her credit card company, she saw she would never be able to do much more than pay interest and penalties on the principal. And the total amount of both would actually amount to more than she had originally borrowed.
So she took the plunge and filed for Chapter 13 bankruptcy. She saved cash because she knew that the bankruptcy filing would affect her credit rating and make it hard to get another loan, and that she would eventually have to spend money for a car. She relied on her debit card rather than any credit card and only bought things she could afford using her salary.
After 20 years, she has not only paid off her student loan and purchased a home but also remained debt-free except for her car and home purchases, and she continues to build her savings. Now she owes less than $100,000 on her home and car, has no credit card debts or student loans to worry about and has a perfect credit score.
Filing for Chapter 13 bankruptcy may seem like a desperate act, but it may be the only viable way out of a credit mess. It can allow filers to start over smarter and wiser and with a better plan for the future. A qualified legal professional can help decide whether it is the best option for any Long Island resident.
Source: Yahoo! Finance, "First Person: 20 Years After Bankruptcy, I'm Still Debt Free," Laura Quinn, Nov. 7, 2013