Avoid Bankruptcy

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Avoid Bankruptcy

Many people find themselves in what seems like a hopeless financial situation.  They may be out of a job, have overwhelming debt and see no way to get out of it.  Now there are cases where one should opt for bankruptcy. However, in most cases, individuals should avoid bankruptcy if they can.

Bankruptcy can be a very trying and devastating experience with long lasting consequences. Most people already know that bankruptcy will negatively impact their credit score which will affect their future purchasing power, but it may also affect whether or not they can get the job that they want in the future.

There are two types of bankruptcy. They include Chapter 7 and Chapter 13.  A Chapter 7 bankruptcy will typically stay on your credit report for about 10 years, while a Chapter 13 bankruptcy, will stay on your report for around seven years. 

A Chapter 7 bankruptcy allows you to wipe out all of your debt and start over. A Chapter 13 is more like a repayment plan where the courts help to reorganize your debt, so that you can pay it back. A Chapter 7 requires you to pass a means test and your income can be no higher then 150% of the poverty level.

Besides the fact that a bankruptcy will stay on your credit report for so long, which is probably the primary reason that people want to avoid bankruptcy, it may also affect whether or not you will be able to land a  job in the future. Some job applications will ask you if you have ever filed for bankruptcy, and you must be truthful about that. 

If you're looking for some ways to avoid bankruptcy, you may want to consider consolidating your bills and a finding a loan that has a lower interest rate then the ones that you are currently paying on your credit cards.  This may allow you to afford your debt.  You may also want to consider working with a credit counseling company. They may be able to negotiate lower interest rates or lower payoff amount. Working with a debt negotiation company is another option.  These types of companies negotiate with the credit card of companies to lower the amount that you owe. Other things that you should consider in order to avoid bankruptcy include creating a budget, getting an extra job, selling your house or downgrading your cars.

Bankruptcy is a very difficult process that will negatively affect your credit report.  If you find the you're one of those individuals that really can't find any way to get out of debt, for example, you may have a lot of medical bills, than you may want to consider bankruptcy.  However, for many individuals, they should avoid bankruptcy because it will take a long time to rebuild one’s credit and it may affect other things such as your future employment and your ability to receive affordable loans.

Did you know using bill consolidation can reduce your total monthly payments by up to 60%? You really can get out of debt.

Fill out of the form on the right to learn more!

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