Thursday, December 13, 2012

Why You Need to Avoid Bankruptcy

Realizing that you are deep in debt can be quite a wake up call. You feel like the floor suddenly disappeared below you. One of the words that you will probably think at this point is bankruptcy.

While you may think that you need to file for one, you need to analyze the situation further before finalizing your decision. This is maybe a legitimate way to get out of debt but you have to understand that there are better ways to find debt relief.

Here are the reasons why you should think twice before filing for bankruptcy.

The first is your credit score suffers immensely. Your current score will go down a minimum of 200 points. Among the other options, this is the debt relief that will harm your credit history the most. And it will be reflected there for the next 10 years.

Because of that record, you can expect that your chances of getting financial aid in the future is very slim. It is not impossible but it will be very difficult. When faced with a crisis, being unable to get the needed financial aid can add to the stress of the situation.

Another reason why bankruptcy should be avoided is because you will not really learn your lesson. When you are qualified for a Chapter 7 filing, you will end up being discharged of your unsecured debts and be declared debt free in a matter of months. Although your credit score will suffer, you will not feel the hardship of paying off your debts - thus never really owning up to your responsibility.

Bankruptcy is still a legitimate way to get rid of debt but you have to understand that there are cases wherein it is the only option possible. Usually, these are the severe cases of high debt to income ratios and the lack of a steady income to support any other debt payment plan. However, the encouragement to exhaust all efforts possible before opting for it is still there.

If you wish to find an alternative to bankruptcy, go to National Debt Relief. Learn about the various ways you can achieve debt freedom without the years of stress and money worries. Click on this link to find out more:

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