Debt Relief Solutions- Bankruptcy is the Last Stop
There are many consumers who have so much of an obligation to their debts that they feel that there is no other plausible solution for their situation than bankruptcy. For some, this might be the only debt relief solution that will be effective. However, people who seek this option need to understand how serious it is and how serious the consequences will be before they agree to anything. Filing bankruptcy should only be done when there are no other alternatives and when the solutions that are available have been exhausted. Here are some reasons why people choose bankruptcy, along with explanations of why these may or may not be good decisions to make.
The ‘Clean Slate' Excuse
It seems so simple to just start over. Clearing your credit history and starting with a clean slate is the only way that many people see debt relief. However, Chapter 7 will require liquidation of all assets that are not exempt, while Chapter 13 will set you up on a 3-5 year payment plan that you have to use all of your disposable income to pay. It hardly seems like an actual fresh start.
Preventing Foreclosure or Repossession
Chapter 13 bankruptcy can prevent these things from happening. However, any payments that were missed are added to the plan that you are put on, and you have to resume payments as usual. It's not a free ticket out of debt by any means, and sometimes just catching up the bills or negotiating with creditors might be more effective. If you get involved with Chapter 13 and miss even one payment, you could be booted from the program altogether, creating more problems than you had in the first place.
Stopping Harassment from Creditors
The phone calls can be obnoxious. The demanding voicemails claiming that you ‘must call before action is taken against you and decisions are made without you' can be scary. However, you do have other options to stop the harassment than just throwing in the towel and filing bankruptcy. Credit counseling agencies can be effective bankruptcy alternatives in this case, as can the services of Epic Debt Relief, such as debt settlement and negotiation.
Preventing Utility Disconnection
Filing bankruptcy to avoid paying bills and keep things going is like wrecking your car so that you don't have to pay off the car loan. Eventually you are going to have to pay, and you don't need to file bankruptcy in most cases. Utility companies generally give people a few months before disconnection is even mentioned, and if you talk to them you might be able to work out a payment plan because they are much more flexible than you might realize.