Is Bankruptcy Really the Answer?

By Geargirl | Oct 17, 2009 | 0 Comments | Rating: 0

You may be sitting in front of your computer wondering if your life has really come to the point that you need to declare bankruptcy. When the bills are piling up and the debt collectors are calling it is very easy to begin to think that there is no way for you to get out for under the debt that you are in. This is why it has become ever popular to use declaring bankruptcy as a way wipe the slate clean. But is it really the right answer to the financial situation that you are in?

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When you declare bankruptcy the collection calls end and no longer receive mountains of bills in the mail everyday. Now a bankruptcy does not erase all of your bills. One bill that you will still have is federal school loans. However, this is a way to clear out all of your credit card debt. Credit card debt is probably one of the top reasons that most people end up filing bankruptcy.

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You no longer owe any of the money that has snow balled into the debt you have. A bankruptcy clears the majority of the money that you owe. Yes, you read that right. It only clears the majority. Declaring bankruptcy does not clear out debt like school loans or back taxes. There are other debts that are not covered and it is important to know this in advance. This is not a payment plan to eventually pay off the debts. With a quick signature by the bankruptcy judge all of your debt disappears.

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The world seems brighter and easier when you are not bogged down with debt. You can start building and saving for your future instead of sinking every cent that you have into paying off debt. All this is possible if you choose to go the route to declare bankruptcy.

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A bankruptcy is on your credit report for 7 to 10 years. This means that you will basically have to put your life on hold for this long. Why on hold? Well, it takes credit to do just about everything these days. Many places will automatically disqualify you just because you declared bankruptcy. An example of this is that apartment complexes will not rent to you when you have a bankruptcy on your credit report. Is having to put your life on hold really worth declaring bankruptcy for?

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Only you know your situation well enough to weight the pros and cons of declaring bankruptcy. Just remember that if this is the path that you chose to go down that you will eventually need to build credit after bankruptcy. There is so much more to declaring bankruptcy then many people think. It is not just a magic wand that eliminates all of your debt without any problems. There are consquences to all of your decisions when it comes to declaring bankruptcy. So you need to take the time to make the decision that is right for you.