Guest Post by Miranda Marquit
Filing for bankruptcy is normally a very difficult decision. While there are those that file for bankruptcy in an attempt to avoid paying their obligations, many bankruptcy filings come after months of agonized consideration as a person attempts to gain relief from a debt situation that has become untenable. One of the main causes of a bankruptcy file is medical bills; these expensive obligations can often push someone over the edge. However, even if you feel that bankruptcy is the only way out for you, it is important to carefully consider your options, since a bankruptcy has far-reaching effects on your financial history.
Discharging your debts
The point of bankruptcy protection is to discharge some of your debts to creditors. However, if you have secured debt (a home or a car), you have to reaffirm that you plan to pay this debt if you want to keep the item in questions. As long as you are current on your mortgage or car payments, and you reaffirm that you will continue to make payments on this debt, these possessions will remain with you. (Note: This is why it is so important to make payments on your secured debt before your unsecured debt.) For smaller items, such as computers or TVs from rent-to-own places, creditors have the right to ask for the item back — especially if you have been using credit cards to make your regular payments.