This horrible economy, call it a depression, recession or what you will, has many people struggling to make ends meet. Many American families are facing the prospect of having to declare bankruptcy. High costs of basic commodities such as food, gasoline and heating oil along with a shaky job market are leaving many families with no other option. Even those who are able to pay their mortgages may be faced with the reality that their home is worth much less than what they owe, further adding to the problem. Savings invested in the stock market have in many cases been depleted due to a dismal market.
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All these factors have combined to leave many hanging on the precipice of financial ruin. Though bankruptcy in many cases may seem like the best or the only option, it can have serious lasting effects on a family's financial future. Though bankruptcy can often dissolve many debts, it usually requires liquidation of many of the family's assets and leaves them unable to acquire replacements in the near term. New bankruptcy laws have also instituted requirements that may not be possible for a family to abide by. If at all possible, bankruptcy should be avoided.
Bankruptcy's effect on credit is disastrous. Upon declaring bankruptcy, a person's credit score basically drops to zero, just as if you have never had credit. It will take years for a decent credit history to be rebuilt and in the meantime, loans are pretty much out of the question. A bankruptcy will remain a matter of public record for 10 years and during that time, any credit one does obtain will come with a much higher interest rate and other limitations such as higher down payments.
Filing for bankruptcy itself can be quite costly. You will have to pay all required filing fees, miss work to attend required meetings and will almost certainly need a lawyer. Though some attorneys advertise affordable bankruptcy services, the term relative is subjective and will likely not seem affordable to you. In short, the money you spend filing bankruptcy could be put towards satisfying creditors and avoiding it in the first place.
Fortunately there are some other options available to you. Many nonprofit agencies exist to help you negotiate with creditors and reduce debts without formally filing bankruptcy. They can help you reduce the total amount owed, reduce interest rates, eliminate fees and set up a consolidated monthly payment plan. These measures are often enough to get people back on track and avoid the lasting effects of bankruptcy.
Keep in mind that some of these agencies do charge a fee for their services. Often, the same results can be achieved by negotiating directly with your creditors. The creditors want to ensure you are able to pay as much or more than you do. They know that if you are forced to file bankruptcy that there'd a good chance they will never see a dime. This is a great incentive for them to work with you.
If you find yourself slipping into the financial bottomless pit, don't put off doing something. The longer you wait the more desperate your situation will be and the harder it will be for you to avoid bankruptcy.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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