Declaring Bankruptcy

Declaring bankruptcy is a big deal and should not be taken lightly.  It is not an easy way out of a little trouble and it should not be treated as such.  If you are thinking about declaring bankruptcy, learn the facts first and really analyze and think about your situation first to avoid trouble.

People declare bankruptcy because they have built up so much debt that they can't handle it.  In most cases, they are just irresponsible with money and continue to charge to their credit cards and take out debt whenever they please.  If this is you, you might not have to declare bankruptcy.

Declaring Bankruptcy Stays on your Records.

Once you have declared bankruptcy, it will stay on your record for 10 years.  This will making it very hard for you to get credit until you are able to repair your bad credit.  Bankruptcy was made as relief, but it doesn't always relieve you in the way you want.

Once you declared it the first time, it gets harder a second time.  Many people declare bankruptcy more than once because they never actually learn how to manage their money and their credit and debt correctly.

There are legitimate reasons to be in too much debt such as surprise medical bills in emergencies, a failed business that you took a lot of loans out for, etc.  Bankruptcy was meant as relief but should only be used in the cases where it couldn't have been avoided and it just can't be managed.

If you pay off debt on your own, you will begin repairing your credit as soon as you stop charging to your credit cards and start paying it all back.  Start paying your bills on time and it will slowly improve.

If you declare bankruptcy, you don't get this chance right away.  You spend months or longer going through the whole process while not working to repair credit.  Then when it's all been finished, you have to work extra hard to fix it.

It is a Long, Irritating Process.

Declaring bankruptcy is not a simple and fast process.  It takes a long time and a lot of time.  You don't have to get a lawyer, but it will save you a lot of time and hardship.  You have to go to a meeting of creditors, get all your debt together and figured out, and you have to work with the trustee in charge of your case.

After all this time, you might not even be able to declare bankruptcy.  Most people aren't able to declare chapter 7, which is when your debts are discharged or liquidated.  You will probably declare chapter 13, where your debt is reorganized.  It is broken up into more manageable chunks that you are able to pay back, therefore, you are still paying for it.

On top of all that, the trustee is going to have to liquidate any assets you have that are easily liquidated.  If you have money somewhere, you're going to have to use it to pay back creditors.

You can Probably Manage your Debt, even if you think you can't.

If you have build up debt in the form of student loans, car loans, credit cards, etc. and you think you can't manage it, you probably can and just don't realize it.  Yes, it's going to take a lot of work.  Yes, it's going to mean living on a lot less than you're used to.  Yes, it's going to mean staying away from all credit and debt in the future.  Yes, it's going to mean actually paying back all those creditors who have been harassing you.

Trust me, once you've paid back all that debt, you will feel credit, have much better credit, and will have hopefully learned how to manage your money so that you never get into debt again. 

Think about it and I hope you make the right choice.  What you think may be the easy way out, might not be quite so easy.