Alternative to Bankruptcy

When facing an overwhelming amount of debt, bankruptcy may seem like your best option or your only option. There are two reasons for this. The first is because you have not heard of or are familiar with debt reduction programs and/or because you think it means your debts will get wiped out and you'll be able to start over fresh. What few realize is that the bankruptcy laws have recently changed to make it even harder to qualify to file for bankruptcy.

In addition, many people who had that same thought when they declared bankruptcy are now facing an uphill battle to pay off debts that weren't written off and to reclaim their credit, qualify for loans and credit cards, buy a house or a car, rent an apartment, or in some cases, even get a job:

• Bankruptcy can leave a terrible stain on your credit report for 7-10 years.
• A bankruptcy can make it difficult for you to get an affordable interest rate when you try to buy a home or a car or apply for some other form of credit.
• A bankruptcy can stay on your official court records for more than 20 years - sometimes for the rest of your life - and can hurt your chances of being approved or hired when you apply for a job or a loan or try to rent an apartment.
• New stricter bankruptcy laws make it much harder for your debts to simply be wiped out in a bankruptcy. You may only be eligible to go into a repayment bankruptcy (a Chapter 13 bankruptcy), which requires you to still repay some or all of your debt on a payment plan.
• If you do qualify for the type of bankruptcy that wipes out your debts (a Chapter 7 "liquidation" bankruptcy), you'll be required to sell off all your property that isn't protected by law.
• Bankruptcy can be embarrassing and damaging to your reputation. There's a negative social stigma associated with bankruptcy that can follow you around like a dark cloud for years.

Bankruptcy is a very serious decision, with consequences that can last for a long, long time. Here at Nationwide Debt Reduction, we recommend that you consider bankruptcy only as a last resort.

If you're thinking of declaring bankruptcy, you should speak with a lawyer before making any decision. If you have time, please read the other articles on our web site as well regarding bankruptcy. The more you can educate yourself about what options are available to you, the better it will help you in making your decision as to what path will work best for you.
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