Filing for bankruptcy should only be used as a last resort if you can’t dig your way out of debt. Don’t be fooled into thinking that a bankruptcy filing has little impact on your financial situation. Going this route is certain to affect your entire life for years to come.

Pushed into Bankruptcy

There are many reasons people resort to bankruptcy. Too much credit card debt, a job loss, divorce, or illness can push anyone into financial ruin. For example, a recent Families USA report said nearly two-thirds of bankruptcy filings are related to medical issues.

Debt Solutions to Avoid Bankruptcy

A bankruptcy filing stays on your credit report for 10 years and can make it difficult to get a mortgage, certain jobs, or even rent an apartment. Don’t wait until it’s too late to get help with debt. Face up to your medical debt, credit card debt and other bills before your accounts get turned over to a debt collection agency. The first step is to contact your creditors to discuss lower interest rates or payment plans.

You can also try to negotiate a debt settlement plan. Some medical providers or lenders may be willing to waive your debt or reduce the amount you owe if you are experiencing serious financial hardship. Even credit card companies have become more open to debt settlement as so many people have been hit hard by the troubled economy.

Debt Counseling Can Help

Another alternative to bankruptcy is debt counseling. A qualified counselor can discuss your current spending habits, help put together a budget, and set up a plan to tackle debt. Look for nonprofit debt counseling that doesn’t require large upfront fees. Check out the reputation of any firm you plan to use with your state’s attorney general and the Better Business Bureau.

Similar Posts:

Share