Should I File for Bankruptcy?

Many people are all mixed up when it comes to figuring out the tough question, “Should I File for Bankruptcy?” Right off the bat I can give you a definitive answer, “Maybe.”

Bankruptcy is a legal process that is available to consumers that are suffering under the weight of problem debt. The law affords consumers a periodic right to establish an affordable repayment plan or completely discharge their debt. This isn’t some made up process that your creditors can laugh off. This is a process with the power of law behind it that your creditors can’t ignore.

This process gives people a legal fresh start and a financial second chance when there is no other reasonable expectation they can break out of the pit the are in.

Bankruptcy should be strongly considered if you don’t see any way out of your situation without an intervention to lower or eliminate your monthly payment. It should also be considered if you want to stop collection calls, stop debt collection lawsuits from advancing or you want to remove wage garnishments.

If you strip away the emotional baggage that comes with considering bankruptcy and look at it as the legal tool that it is, then there are many reasons to consider filing for bankruptcy.

Say for example you have fallen behind on your car payments or mortgage and you want to stop a repossession or foreclosure. In that case bankruptcy can stop those actions and it can help you to get back on track with your obligations if you can afford the regular monthly payment plus some to get caught up.

Let’s say that through no fault of your own you have fallen behind in debt and just can’t dig your way out and you have little equity in your home or car. In that case you may be able to file a chapter 7 bankruptcy, keep your home and car, and legally discharge your debt on your unsecured credit in just a few months.

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Considering if You Should File for Bankruptcy

The reality is that only by speaking with a local bankruptcy attorney will you have an informed and educated review of what bankruptcy would mean for you. Without speaking to an attorney you are only guessing and listening to supposition and conjecture. Even I can’t tell you to absolutely file bankruptcy. Only a licensed bankruptcy attorney can help you get the facts.

Many other debt relief providers will scare you and tell you to avoid bankruptcy. Why? Because they want to frighten you away from bankruptcy so they can sell you their debt relief product instead. Sad, but true.

It is my experience, those consumers that embrace the bankruptcy process and review it in a logical and reasonable fashion, find that if they are good candidates for chapter 7 bankruptcy they can deal with their debt quickly, rebuild their credit quickly, and be recover faster than though other solutions.

Bankruptcy does have some consequences. It may initially lower your credit score. But then again it may raise your credit score as well. Every situation is different. Bankruptcy will appear on your credit report for seven to ten years, depending on what type of bankruptcy you file. But then again a debt settlement approach where you default on your debts will appear for seven years.

So you see there is no one hard and fast answer until you do some legwork and talk to a bankruptcy attorney. You can click here to talk to a licensed bankruptcy attorney in your area. They will give you a free consultation and there is no obligation.


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Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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