When you are buried in debt and the phone is constantly ringing with bill collectors on the other end, it can be nearly impossible to think clearly at times. It’s easy to see bankruptcy as the only viable alternative to your financial crisis. Even though you may feel worried and completely alone, this same situation is played out for millions of Americans each and every year. See why we are voted the bankruptcy lawyer san diego after helping people face their financial crisis. Filing for bankruptcy is certainly an option in most cases, but is it your best option? Let’s take a look.
If you are considering filing for bankruptcy, keep some of these points in mind. Do you owe the IRS? Bankruptcy will not discharge any IRS issues. Do you owe back child support? The same thing applies to child support. Also, if you have a court ordered judgment against you, a bankruptcy filing will not excuse the debt.
A bankruptcy will show up on your credit report for the next 10 years. That’s a long time. It will create added financial difficulty in getting any type of loan or credit card. Sure, you may be able to get a high risk credit card, but you’re looking at high fees and even higher rates of interest.
You should also know that the courts can take possession of your assets in a bankruptcy proceeding. The courts can use your assets to help satisfy your outstanding debts.
Finally, a bankruptcy can even prevent you from being able to hold certain careers, such as an accountant or magistrate just to name two examples.
About the only tangible advantage of going bankrupt is that the harassment from the bill collectors will finally go away. Although that in and of itself is a good thing, it shouldn’t be the reason to take this drastic of a step.
One solution to avoid going bankrupt is debt consolidation. A debt consolidation company can take over control of your bills and set up a plan of action to pay back your creditors. These companies will talk with your creditors and work out arrangements that in many cases, you couldn’t make on your own. This alone may make filing for bankruptcy unnecessary. Your only obligation in this type of situation is to make a monthly payment to the debt consolidator.
Recently, the bankruptcy laws in the U.S. were dramatically changed. In late 2005 the laws were changed, making it nearly impossible to file a Chapter 7 bankruptcy. The new laws want all bankruptcies, except for extreme cases, to be filed as a Chapter 13. The difference in this is that a Chapter 13 forces you to pay back your debts within a 3-5 year period. Well, you could do that without filing by going with a debt consolidation company. Even though your credit is still damaged, you won’t face 10 years with a bankruptcy on your record. That makes a huge difference in the eyes of lenders.
The new law also requires individuals to meet with credit counselors for 6 months, and also attend a money management course on your dime.
I would strongly advise anyone who is considering a bankruptcy filing to take the time and research out your options. Talk with an attorney who specializes in this field and make a well informed decision before proceeding. You may very well find that bankruptcy is not your best choice after all.