Is Bankruptcy the Only Option?

Due to the size, it sometimes seems that some financial hardships are insurmountable and can only be solved by filing for bankruptcy. But is this necessarily the best option? If you feel like "there must be some other way," chances are you are right and you should seek other solutions.

There are many reasons someone would file for bankruptcy. More often than not, these reasons are personal crises that carry a hefty price tag and/or inhibit the affected person's ability to make money. These crises may make bankruptcy seem like a good, but this is not always true.

There are many lawyers and firms who would like you to believe that bankruptcy is the only way to end your financial troubles. These people make their money off people like you filing for bankruptcy and may not have your best interests at heart.

Bankruptcy is a last resort-option that should be considered only after all other avenues have been exhausted. Filing for bankruptcy under the pressure of a lawyer, family member, friend or business associate should never be considered. Educating yourself about bankruptcy and making an informed decision is essential. For better or worse, bankruptcy will change your life and you need to know what to expect.

So Why Do People File For Bankruptcy?

1. Medical Debt- According to a 2005 study done by Harvard University, medical debt is the No. 1 reason for bankruptcy. However, many states offer help to low-income individuals and families to offset the cost of medical care. Before filing for bankruptcy, see what kind of help is offered to you by your state.
2. Sick Of It All- Creditors have a knack for harassment. For some people, the phone calls and ceaseless contact from their creditors can turn their lives into a living hell. Before deciding upon bankruptcy, consult your lawyer to see if there is a legal means to stop the harassment.
3. Loss Of Vehicles- For a creditor, it is much easier to work out a revised payment plan than it is to repossess a vehicle. However, if repossession ends up being the only option, the loss of freedom that results will still be less than that of bankruptcy.
4. Wage Garnishment- No matter how much money you owe, there are laws in effect at state and federal levels that allow you to maintain a minimum standard of living. If threatened with wage garnishment, it is essential to first consult your lawyer.
5. Downsizing At The Workplace- If you have debt and end up losing your job, it is important to immediately seek advice and compensation from your local unemployment office. You should plan ahead for at least the next three to six months. Many areas also offer programs that will retrain laid off workers for new careers. See what is offered near you.

This is not to say that filing for bankruptcy is never an option, just that it should be the last one. The important thing to remember is that filing for bankruptcy is a decision that only you may make for yourself after careful consideration of every other option available.

• Debt Consolidation
• Tax Debt
• Credit Counseling
• Bankruptcy

Debt Topics

• Avoid Foreclosure
• ABC's of Debt Consolidation

Credit Topics

• Consumer Protection Laws
• Your Poor Credit Report

Bankruptcy Topics

• Refinancing After Bankrupcty
• Is Bankruptcy the Only Option?

Tax Relief Topics

• Lower Your Tax Debt Now
• Property Tax Relief Guide