Is bankruptcy best if you are in debt over your head with no way out?

Answer 1

The change in bankruptcy laws made it more difficult to file, not impossible. Chapter 7 and Chapter 13 bankruptcy are still essentially the same. There are stronger burdens on the debtor and the debtor attorney now, additional paperwork necessary, and 2 sets of credit counseling required. All of this takes more time, resulting in more cost to the debtor but the results of bankruptcy are the same.

That said, bankruptcy should always be a last resort. Since you did not give additional details, it's hard to say whether it's best for you. No way out? Then, of course, bankruptcy is your best option.

You do have the option to see a credit counseling agency approved by the bankrutpcy court to determine if you could fit into one of their plans or if bankruptcy is their suggestion. They are well versed in the possibilities both ways. They can also give you the certificate required for bankruptcy once you have completed the program, if necessary. You can find them for your state at http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm.

Hope this helps. Good luck to you.

Answer 2

Bankruptcy is a legal protection against consumer debt that allow people to be freed from debt for a fresh start however it stays on record for 10 years making it difficult to obtain credit for that amount of time. Some debts (child support, taxes, student loans) cannot be dismissed in bankruptcy. Because bankruptcy is a legal issue, it's not up to the consumer to decide if he or she qualifies but rather up to the courts. Only a qualified bankrtupcy attorney can tell you if you should file bankruptcy for your situation. In some cases the court will force you to sell your home, car, etc. There are mounds of paperwork to be filled out and court appearances are scheduled in which your creditors have the chance to challenge your filing. Debts that are unpaid are written off by creditors which means that other consumers are the ones who suffer for the growing number of bankruptcy cases. It should not be considered unless a last resport due to medical issues or other life altering problems that make it impossible to pay debts. There are two types of bankruptcy... one is a court ordered repayment plan while the other is a fresh start with no debts and no assets. These are all questions best aimed to an attorney that specializes in bankruptcy.

Answer 3

Bankruptcy is a pretty serious step. Are you sure that is your only way out? Try telephoning all your creditors and explaining you situation to them. They don't want you to go bankrupt or they get nothing so you will probably find that they will do there best to come up with solutions. They may agree to reduce your debt or extend the repayment period to enable you to get back on your feet. Lots of people are afraid to try this, but look at it this way, what's the worst that can happen? Even if they can't help you, you won't be any worse off. It would be a shame to become bankrupt with the years of problems that will give you, without at least giving it a try.

Once you've negotiated with your creditors to ease the burden of your repayments you can look at the other things you can do to reduce your outgoings. Write a diary of every penny you spend to enable you to analyse your spending and see where you can cut back.

avoid debt consolidation if you can. Getting into more debt to pay of existing ones is rarely a good plan. It looks good if the interest rate is lower but generally you will be paying it back for much longer and eventually end up paying more.

It probably looks like an overwhelming problem to you just now, with no hope of a solution but try to break the problem up into smaller more manageable parts and deal with them one at a time.

Good luck.

Answer 4

As others have said, bankruptcy is a last resort and now does not mean that you can just walk away from your debt.

Do your own research before you make a move as there could be alternatives. There's a website here which has a lot of useful advice and information.

Good luck!

Answer 5

no. bankruptcy laws have changed. you just can not wipe out your debt anymore. Law states that you have to pay it back one way or another. They can take your home, IRA, 401K, pension. Any where you have money they have the right to take from you. There are a lot of books on how to get out of debt, give that a try. I did and now I am debt free. Yahoo!!!!!!!!!

Answer 6

Try debt consolidation first.With bankruptcy you have no credit at all for 7 years and then you have to start all over again to build your credit

Answer 7

I put it in the source box. It has a free download shareware debt management program. It works by putting in your income, living expenses and then your debts. The software returns a printable database on exactly how to spend your money and more importantly how to reduce your debt. Remember its free and similar to programs that debt management companies sell to you when you ask them for help.

Answer 8

No.