No matter the situation, bankruptcy is a highly personal decision which can have both good and bad consequences. In fact, for some people it can be an unfortunate but very necessary choice. One thing we at Credit Card Debt Consolidators always stress, however, is that our clients understand all of these consequences, as well as the wide array of alternatives to bankruptcy.

Bankruptcy may indeed be a valid option for you if you are nearing retirement, have more than four dependents, have an extremely large secured debt load and a small savings level. Depending on your situation, however, these factors do not automatically necessitate bankruptcy.

Before you make a decision, please contact us.

The following is a primer on bankruptcy laws. Understand that the following passages are not offered as legal advice and should not be considered as a alternative to legal counsel.

Chapter 7 Bankruptcy: Important Details to Understand
Once Chapter 7 Bankruptcy is initiated, your assets (minus some exemptions) are liquidated, with the proceeds used to pay your creditors. Certain creditors have precedence over others, of course, and this is outlined in the bankruptcy code.

Generally, Chapter 7 has the quickest effect and is often the simplest to understand. This is one of the reasons why it is the most popular form of bankruptcy in America today. However, it is never a cure-all. Despite the damage it inflicts to a credit rating, it also cannot alleviate child support, student loans, court fines and some others.

Under Chapter 7, a full disclosure of your personal financial information is necessary. Some examples of information that must be declared are income, property and assets, liabilities, exempt assets, and all property transactions over the previous two years. Needless to say, if you value your personal privacy, Chapter 7 is definitely not the best vehicle for you.

Chapter 13 Bankruptcy: Important Details
Chapter 13 Bankruptcy is a entirely different beast than Chapter 7, wherein assets are not court liquidated. Instead, a repayment plan is negotiated between the debtor and creditors, to which the court binds both parties. In exchange, the debtor can retain all (or most) property as long as regular payments are made to a trustee over the life of the plan.

A Chapter 13 filing is basically a commitment to paying off your creditors over three to five years. Debts are renegotiated, so that often settlements are much lower than before filing. But, an important fact to note is that this form of bankruptcy may stay on your credit report for up to 10 years after your last payment. Obviously, this can have dire effects on applications for credit - which may include buying a home or financing a business.

Another unfortunate consequence of both Chapter 7 and 13 bankruptcy is that it may also reported to insurers and employers for the rest of your life. Which makes it an extremely long-term decision, despite the fact that it appears, on the surface, to be short-term.

Debt Consolidation Vs. Bankruptcy
Most Americans do not understand that debts can in fact be consolidated without ever needing to file for bankruptcy. In fact, debt consolidation programs like ours use similar techniques and offer similar results as Chapter 13 bankruptcy - except without the harsh credit consequences that such a bankruptcy creates. Our goal is to save our clients from bankruptcy, and to preserve - or better - their credit report results.

With Credit Card Debt Consolidation, most clients obtain debt freedom within two to four years, and sometimes less. Total debt savings can be anywhere from 50% - 75%, and no legal fees are charged. Most importantly, your credit standing is often improved because you acted in good faith towards your creditors, instead of filing for bankruptcy.

The effects of avoiding a bankruptcy are truly worthwhile, especially if you have hopes of buying a home, car or property over the next 10-15 years. These are just some of the benefits of debt consolidation.

We recommend you contact us to find out if our program can work for you.

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