Filing Bankruptcy
Filing bankruptcy has the potential to devastate your credit score for years to come. It also carries with it a stigma that many people never free themselves of. For these reasons and more, we do not offer support for filing bankruptcy, but we do want to make sure you understand all of the debt relief options available to you.
Understanding Bankruptcy
Filing bankruptcy is no trivial matter – it can be one of the most stressful situations you will ever deal with in your life. Depending on the type of bankruptcy you consider, you will have to deal with long term consequences: 
- If you declare Chapter 7 bankruptcy (also called “total bankruptcy,“) your credit report will show this for the next 10 years, making it more difficult to obtain credit in the future.
- If you declare Chapter 13 bankruptcy (in which you make some level payments on your debt), you may be able to get the event removed from your credit report after seven years, but it is not guaranteed.
- In addition, you may be forced to report your bankruptcy to a potential employer if asked to for the next ten years, but for the rest of your life. This may jeopardize your chances of getting the job you want in the future.
- Your bankruptcy will be a matter of public record – forever.
Changes in Bankruptcy Qualification
In 2005 changes were made as to how you can qualify for a bankruptcy. One of the most major changes was the implementation of a states "means test" to determine whether or not the debtor would qualify for a Chapter 7 or Chapter 13 Bankruptcy. In short, if the debtors income is below the states median income they may qualify for a Chapter 7 bankruptcy. If the debtors income is above the states median income they would most likely qualify for a Chapter 13 Bankruptcy.
In a Chapter 13 bankruptcy the court typically requires debtors to pay back anywhere between 30 to 70% of the debt back through a court appointed trustee.
Another Debt Relief Solution: Credit Card Debt Settlement
For certain individuals, debt settlement is a better option than filing bankruptcy, and can protect and preserve your ability to remain creditworthy in the future while providing debt relief in the short-term. How might debt settlement be a preferable alternative to filing bankruptcy?
- Unlike debt settlement, filing bankruptcy is recorded on your credit report as a major negative event where you failed to pay your creditors. Debt settlement can allow you to have your creditors mark your account as “paid,“ which works strongly in your favor.
- Unlike debt settlement, filing bankruptcy is a difficult situation to keep to yourself. Important events such as a job hunt – or in some cases applying for life insurance could be more difficult to complete successfully. Debt settlement on the other hand never need come up in these types of situations.
- Unlike debt settlement, filing bankruptcy is typically viewed as a way of “getting out of paying your bills“ and can leave you with a lot of emotional baggage and negative feelings. Debt settlement can actually lead to empowering feelings, because you take proactive steps to clear out all of your unsecured debt in 12 to 36 months.
Making The Decision: Discover Your Debt Relief Strategy
Filing bankruptcy is not the ideal answer for everyone who is facing debt-based stress. And while credit card debt settlement can be a very effective way to get your finances back on track, you need to have all the facts before deciding if it is right for you and your situation. Contact one of our debt relief specialists now to find out which debt relief solution is best for you. Call 1-877-956-1500
