People loves credit card because it provides convenient on spending that meets today’s lifestyle, but they also hate it because it may cause them to trap in overwhelming debt, some people even need to go for bankruptcy filing to relief themselves from credit card debt. If you are at this worse financial situation due to large credit card balances that beyond your financial affordability to clear it, what are the options available for you to resolve your debt problem?

Many heavy credit card debtors tend to think of going for a bankruptcy filing so that they can relief themselves from hassling phone calls and surprising visits from their creditors to ask for their debt payment. But, they did not or might not aware of the consequences of filing a bankruptcy that will follow them for years (7 to 10 years) before they can freely reuse their credit again. Hence, bankruptcy filing should always be your last option after you have explored all alternatives for better options than bankruptcy which can potentially resolve your debt issue.

Credit card debt consolidation can be your alternative to bankruptcy. You should always explore this option for debt relief before you go for extreme solution such as bankruptcy filing which may badly hurt your future credit worthiness. You either can choose to consolidate debt with an unsecured or secured loan. But, if you have reached the status of receiving harassing phone call and getting visits from debt collectors, then you may already hurt your credit ratings due to the late payment or default payment. Then, it might be hard for you to get an unsecured loan to consolidate your credit card debt; however, it still worth to try to search for one, but be prepared that you won’t be able to get the best interest rate. If you manage to get an unsecured loan with interest rate that is good enough to consolidate the debt and bring it to current status, then you can avoid the need to filing for a bankruptcy.

If you own a home, you will be at a better situation to resolve the overwhelming credit card debts by consolidating them into a secured loan. You can apply for a home equity loan or refinance a mortgage to cash out money to pay off your debt. By pledging an asset for a loan, you should be able to find a good loan with low interest rate which you can use it to consolidate your debt. Remember, using your home to secure a loan also means that you are risking your home because you may lose it if you default the loan, so you should always make your loan repayment on time and don’t build more new debt before you clear the loan.

Summary

Bankruptcy filing is not the only solution for heavy debtors to get a relief from their overwhelming debt problem. You should always explore other alternatives for better debt relief options such as debt consolidation, which can potentially resolve your debt problem and able to minimize impacts on your future credit worthiness.

You have unbearable debts and considering filing a bankruptcy as your debt relief?

Don’t choose this option unless you really need to do so, look for other alternative if possible such as debt consolidation. Bankruptcy should only be you very last resort solution when you really can’t find other solutions.

Bankruptcy has many undesirable consequences that will follow you for many years, it will remain on your credit report for 10 years; almost no lender will even consider you as a borrower for at least 2 years. Debt consolidation will always be your better option than bankruptcy.

Get Help From A Debt Consolidation Agency

There are many prestige debt consolidation agencies out there that can assist you to reduce your debt significantly and help you avoid the consequences of bankruptcy. When you contact a debt consolidation agency you’ll be assigned an agent with a wide experience in negotiating with creditors.

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Chapter 13 bankruptcy, also called reorganization bankruptcy, is quite different from Chapter 7 bankruptcy. In a Chapter 7 bankruptcy, most of your debts are wiped out; in exchange, you must relinquish any property that isn’t exempt from seizure by your creditors. Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.

Generally, you are probably a good candidate for Chapter 13 bankruptcy if you are in any of the following situations[…]

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Chapter 7 bankruptcy is sometimes called “liquidation” bankruptcy, it cancels your debts. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick “fresh start”.

Check Your Eligibility Criteria

Not every person who is seeking of getting debt free by filling bankruptcy will be eligible to file under chapter 7. You won’t be able to use Chapter 7 if you already received a bankruptcy discharge in the last six to eight years.

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Filing for bankruptcy is a very personal decision. Heavy debtors may choose to file a bankruptcy if they see no other way out from their heavy debts. By declaring bankruptcy and filing a petition with U.S. Bankruptcy Court, the bankruptcy filer will be protected and relief from debts under the Bankruptcy Code.

Bankruptcy filing should be you last option if there are no better options available, because the consequences of filing a bankruptcy will follow you for 7 to 10 years. These are some of the consequences of filling for a bankruptcy[…]

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