Chapter 13 Bankruptcy
Consumer Bankruptcy can be an ideal way to correct financial problems. When spending gets out of hand, creditors pour fuel on the fire by offering higher spending limits and atrocious late payment and over-limit penalties. It has also become common to lure consumers in to purchasing consumer goods on installment loans with the provision that zero percent interest applies as long as the loan is paid within the time prescribed. One trick lenders have up their sleeves is to suggest a monthly payment too low to pay the loan off in time. Another tactic is for lenders to insert penalty clauses in the fine print imposing permanent increase in interest rates on default in payments. This tactic will add thousands of dollars to the debt you carry and harm your credit profile making it less likely to obtain credit in the future on favorable terms.
Through a Chapter 13 Wage-Earner plan, you can commit regular disposable income to repay debt over a fixed period from three to five years with low priority debt, such as credit cards and most taxes, at zero percent and only creditors who choose to participate getting any. There is also NO requirement to pay all you owe in most circumstances. Chapter 13 Bankruptcy is also a great tool to use to deal with delinquent taxes for the reason that old taxes are grouped with other low priority debt which accrues no interest with no requirement to fully pay.