The mass majority of people in debt for reasons other than the sudden loss of a job or a major illness do not consider all of their options before choosing to declare bankruptcy. In today's economy, there are only a handful of debt free households.
Everyone who has experienced any amount of debt has wished all their troubles would disappear and they could start afresh debt free. People misinterpret bankruptcy as an immediate way to eliminate overwhelming debt and they leap at the opportunity, believing they are wiping their slate clean. In doing so, they fail to take into consideration the long term negative effects bankruptcy has, and they overlook all of their more beneficial options.
Bankruptcy is a legitimate way to partially or completely eliminate certain immediate debts, but this option is not without consequences. Banks will be extremely cautious about giving out loans to anyone who has declared bankruptcy. A person will not qualify for a home loan for at least two years or more after they declare bankruptcy. Once they finally receive a loan, the interest rate will most likely be very high. Credit cards will also be more complicated. They will only be allowed to take out small amounts of money on the cards, and it will take years to re-establish a noteworthy credit.
Before a person considers declaring bankruptcy, there are some steps they can take on their own to try and balance their bank account out. Some simple steps to take would be to start drastically eliminating everything that is an unnecessary expense, like a boat, gym membership, high priced and unpaid for sports utility vehicles, and spa treatments. Then, take the money that you are saving and use it to pay off loans and debts.
If this is not enough to pay off the debts, consider getting a part time job. Next, schedule a meeting with a professional credit counselor who can help form a more accurate budget and negotiate new payment plans with creditors. In most cases, banks and creditors will do whatever they can to help you repay them because bankruptcy has negative effects for them as well.
Bankruptcy should not be a consideration for those who have a steady income and some form of means to pay off their debts. The options previously mentioned, along with the hundreds of options left unmentioned, should always be considered before anyone makes the decision to declare bankruptcy.
The decision to declare bankruptcy is never an easy one but if this is what you need to do, make sure it is your option of last resort. There are almost always other options open to you that do not have the long term negative impact that filing bankruptcy will have on you and your credit report for many years. Your best bet is to get a free bankruptcy evaluation so you can know where you stand and what options you have. For more insights and additional information, as well as to get a free bankruptcy evaluation, please visit our web site at http://www.bankruptcy-data.com/
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