Bankruptcy is a law designed to relieve people of crushing
debt, which is beyond their control due to catastrophic illness
and/or job layoff. Bankruptcy is a federally mandated law,
which takes two approaches to debt liquidation. One is a chapter
7, which is a "straight liquidation" of 100% of
most debts at the time of discharge. The other is a chapter
13, which provides for a repayment plan, which may pay for
all, or a portion of the debt incurred.
Because it is easy to obtain credit and use it indiscriminately,
it is very easy to loose track of your spending. Unfortunately,
the reasons most people have been forced to file for protection
have nothing to do with illness, unemployment or hardship.
Too often the causative factors are dissolution of marriage,
inability to manage finances and spending mania. The great
American public is a society built upon "consumerism."
The average bankruptcy is still about $25,000.00. This let's
you know that as a society, we no longer try harder. Bankruptcy
is not a solution; it is part of the problem!
- Did you know that filing for bankruptcy is a public record
and, as such, may be listed in the local newspaper in the
- Did you know that the bankruptcy discharge would remain
on your credit report for 10 years?
- Did you know that it could cost hundreds of dollars to
- Did you know that discharged loans are losses for the
companies that you have not paid and that it indirectly
affects the overall economy of this nation which affects
every man, woman, and child in this nation indirectly?
- Did you know that not all debts could be discharged under
- Did you know that bankruptcy proceedings are public and
very time consuming?
- Did you know that many companies would not hire bankrupt
filers (such as banks, credit unions, and many other financial
- Did you know that bankruptcy might keep you from obtaining
an apartment or the purchase of a home?
- Did you know that for the past two years more than one
million people have filed for protection under the various
chapters of bankruptcy?
- Did you know that the law requires attorneys to certify
that they have counseled clients about bankruptcy effects
Talk to your creditors… inaction is much worse than
the possibility of a bad experience on the telephone. Just
in case you are not aware, there are laws, which protect consumers
from abusive treatment. Believe me, your creditors would much
prefer to work out a viable payment plan, than to receive
a notice of bankruptcy filing.
Now that you are aware of some of the pitfalls involved
with bankruptcy filing, is this the route you are willing
to pursue? It took quite a while to get where you are and
I can guarantee you it will take you a longer period of time
to pull every aspect of your financial life together. There
are no "quick fixes". The time spent rectifying
this problem will be well worth the effort. I only ask you
to get some thought provoking advice before you embark upon
a "ten year mistake".
Finally, bankruptcy can be very demoralizing. Most people
feel better when they pay their bills.
There is just no easy way to get out of debt. A bankruptcy
is not always the answer, as the effects are long lasting.
Ask yourself these questions:
Can you reduce your monthly expenses, even if it
means making hard choices?
Could you change your lifestyle to fit your income?
The following is a list of some ways to reduce your
- Selling the second car
- Pulling equity out of your home
- Applying for a non-secured signature loan to consolidate
- Loan from a relative
- Selling your home and paying off your debts with the proceeds
and then renting
- Cashing out your 401K retirement benefits
- Selling family heirlooms, jewelry, guns etc.
- Work out a reduced payment with some of your creditors.
It's important not to jump into bankruptcy until you understand
what you will get out of it in the end. Some people file for
bankruptcy when there is little need to do so. In many cases
settling with creditors or getting help from a credit counseling
service could better resolve your debt problems.