You:%$#146;re thousands of dollars in debt, unable to pay your bills on time, and the creditors keep calling. Bankruptcy is beginning to sound like a reasonable alternative to spending all of your money each month without making a dent in what is owed. After all, you will be able to wipe the slate and start over again, right$%: Wrong. Declaring bankruptcy can end up costing you more than you think.
First of all, in order to qualify for Chapter 7 bankruptcy, your income should be less than or equal to the median income for your state. If it is over this amount, you must reach further requirements or else you must file Chapter 13, which requires you to pay most of your debts over a specific period of time. In addition, bankruptcy lasts on your credit report for ten years and can make it extremely difficult to buy a home, rent an apartment, and even obtain car insurance. Plus, if you are able to acquire loans or insurance, your rates will skyrocket.
Bankruptcy also requires you to hire an attorney (it is not mandatory, but strongly suggested), which can on average cost as much as $2500, or even more, not including court filing fees and mandatory counseling services. Also, beware of unreliable or dishonest attorneys; you could end up paying an even bigger price. Click Here [http://articles.moneycentral.msn.com/Banking/BankruptcyGuide/BewareCutRateBankruptcyAdvice.aspx/] to read an article on fraudulent bankruptcy attorneys.
Within 45 days of filing, you are required to submit your detailed income, expense statements, and tax returns. This process can be very tedious and increase the amount you are paying your attorney. If these are not filed within the appropriate time frame your case can be dismissed. You also must attend all of the required meetings or risk having your case dismissed.
If you are thinking of filing Chapter 7 or Chapter 13, you may want to consider more viable options such as debt settlement. Debt settlement allows you to reduce your debts approximately 65% and to repay the amount in a short period of time. The debt settlement companies work with your creditors to insure that you receive a huge reduction in what you pay, so that you can pay your debt off quickly. Learn how to select a reliable debt settlement company here [http://www.usfmgroup.com/articles/Credit-Counseling-and-Repair-articles/choose-debtcompany.php].
Debt consolidation is another option; however, with debt consolidation you are merely transferring your loans. You still have to pay them in full by securing them against collateral, such as your car or house, putting these assets at risk. Plus, because the period of repayment is longer, you generally end up paying a lot more interest on your debt than you originally would have. So, if you are deeply in debt this may not be a good alternative for you.
Bankruptcy may seem like a good option, but in then end it can damage your self-esteem and your credit. There is a reason that a law has been passed preventing individuals from filing Chapter 7 within eight years: it is not a lasting solution. There are many other programs out there, such as debt settlement, that can help to drastically reduce what you owe and can help get you on track for a better financial future.
Download the free e-book Debt Free at Last [http://usfmgroup.com/debt-negotiation-book].
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