Filing Bankruptcy Should Be Last Choice If Possible

Bankruptcy is a federal court process that allows people to eliminate their debts and be protected by the bankruptcy courts

. There are two main types of bankruptcy, they are, chapter 7 and chapter 13. Although there are other 'chapters' most people do not qualify for these types of bankruptcy proceedings. Chapter 7 and 13, both have rules and guidelines, that you have to follow and both are part of a very time consuming process. Bankruptcy will stay with you for at least seven years. Before going down the bankruptcy road, look at some other options.

Going to a credit counselor, or debt settlement company can be a positive choices over bankruptcy. There are hundreds of agencies that can help you to work with your creditors. When you sign on with a credit counseling group, they will first gather all your information. Then, they will take steps to contact all your creditors and work out deals to lower your payments and balances. When this process is complete they will come back to you with a new low monthly payment. You pay this amount to them and then they parcel out your money to the creditors.

Often credit counseling offices will also offer financial planning services. Financial planning services will help you gain the skills to move forward and keep a healthy financial outlook. They will show you how to stay out of debt and maintain your money. Often, people struggle financially because they were never shown how to properly manage their money; working with a credit counselor can give you those skills.

Since there are a lot of credit counseling businesses, it is important to take your time in picking the right one. A true credit counseling business is not going to charge you a bunch of money to take on your case. Get as much information on an agency as you can, before signing any papers. The Better Business Bureau is always a great resource. If you find an agency online, verify their physical address and talk to a counselor over the phone. Never give out your information over an email before confirming the business is reputable.

Bankruptcy laws change every year, which often makes it harder for people to file. The current economic situation is putting more and more families in a place where they need to take drastic action to get by. As people have watched changes in their income, savings, and retirement accounts, the government has been making changes to the rules for filing bankruptcy. Many families are discovering that working through credit counseling is actually a better choice.

by: Bill Gatton

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