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.
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Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno. She enjoys writing informative articles about debt management and personal finance.