Credit Card Debt and Insolvency - Why Insolvency Is Never an Alternative

Credit Card Debt and Insolvency - Why Insolvency Is Never an Alternative "When credit card debt becomes uncontrollable, everyone considers filing for bankruptcy. However, what are the consequences? Let me explain why declaring bankruptcy is the worst solution to your financial problems. A significant disadvantage of declaring bankruptcy is that it will remain on your credit report for 10 years, making it difficult to maintain a positive credit history during that time. The federal court will keep a permanent record, and those records are accessible to the public. Frequently, credit applications will inquire whether you have ever filed for bankruptcy, and you are required to respond truthfully, regardless of whether 10 years have elapsed.The expense is another negative aspect of bankruptcy. Recent alterations to the bankruptcy code have resulted in an increase in filing fees, and you are required to pursue credit counseling services before filing. If your case is complex, it is also recommended that you engage a bankruptcy attorney. You may end up paying between $700 and $2,000, money that would be better applied to your debt.Similar modifications to the bankruptcy code will determine the type of bankruptcy that can be filed. There are two types: Chapter 7, which will eliminate all of your debt except for non-dischargeable debts such as child support or taxes, and Chapter 13, which requires you to come up with a stringent payment plan to pay as much of your debt as possible over a 5-year period. Chapter 13 bankruptcy must be filed if you can pay at least $100 per month toward your debt.Bankruptcy may appear to be a fast and simple solution, but it will only make your situation worse over time.
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