Avoid Bankruptcy
Regarding avoiding bankruptcy, according to the American Bankruptcy Institute and Federal Reserve Bank, more than half of the personal bankruptcies filed by consumers in recent years were due to credit card debt. The next highest category was due to personal medical expenses, much of which was paid for using credit cards but not reflected in the credit card statistic, followed by home mortgages. Most, if not all, credit card and other unsecured debt related personal bankruptcies could have been avoided with the debtor reaching an amicable agreement through a debt settlement process.
If at all possible, avoid bankruptcy. It remains on your credit report for 10 years and can affect your ability to obtain future credit, buy a home, get life insurance, or find a job for your entire life. Secured credit cards requiring a full deposit for the amount of the credit sought are typically the only type of credit card you may qualify for and obtain for many years. It remains in court records for twenty years and most job, mortgage and credit applications ask if you ever filed for bankruptcy. It is a Federal offense if you do not answer the questions truthfully.
Filing for bankruptcy protection can result in serious and long term consequences. Any consumers considering Chapter 7 and 13 personal bankruptcy are required to hire an attorney The bankruptcy reform law requires that you complete a Personal Financial Management Instructional Course.
Declaring bankruptcy may result in loss of valuable personal assets or equivalent cash value.
Another reason to avoid bankruptcy is that personal bankruptcy can negatively impact your social status.
There are many disadvantages to bankruptcy, all of which point to why it is preferable to avoid bankruptcy. After Bankruptcy, it may be extremely difficult to buy or rent a home, obtain insurance, obtain security clearance and/or buy or lease a car.
Whether one can avoid bankruptcy and pursue another debt solution depends on each individual debt situation. Bankruptcy should be elected only when other options fail. The best option for your debt situation can best be determined by a Professional Debt Counselor.
