Credit Guru

Many people struggling with debt are finding help through financial counseling, a relatively new field that is attracting both mental health and financial professionals. Most financial counselors help clients not only sort through their debts and create a plan to get out of debt, but also deal with the issues that produced overspending in the first place.

Going Bankruptcy Route

Filing bankruptcy is an emotional and a very complex decision that should be undertaken with very careful consideration. It should only be examined as an option after all attempts to control spending and credit use have failed; and the help of a credit counselor or debt consolidation plan has not been enough to get you back on the road to financial recovery.

Bankruptcy is a constitutional right, governed by state and federal law, to ask a court to declare a person unable to pay his or her debts. If the court grants the petition, a trustee divides the debtor’s property and pays each creditor as much as the assets or the future earning ability will allow. According to GetDebtFree.com, personal bankruptcies are at an all time high of about a million a year.

Declaring bankruptcy is an option that is not difficult to do, but bankruptcy has many consequences that will affect your ability to get credit for the rest of your life. A credit history that contains banruptcy will make it extremely difficult, if not impossible, for you to get credit. Bankruptcy remains on your credit history for 10 years but the stigma attached to bankruptcy may last even longer.

Oftentimes, credit applications ask if you have ever filed bankruptcy, not just if you have filed bankruptcy in the last 10 years. It is paramount that you understand the consequences and look at all of your options in reducing your debt before you choose bankruptcy. While some debts will be eliminated, others, such as alimony and child support, will not be. So, besides looking at the amount of debt, you must also look at the type of debt you have in deciding whether bankruptcy is right for you.

If you are considering filing for bankruptcy, I recommend hiring a lawyer who is an expert in bankruptcy law. The attorney’s fees and payment plan should be established ahead of time, and it is important that the lawyer communicates well with you. If you don’t have a good emotional connection with the lawyer you interview, move on to another interview since it is necessary to find someone capable of assisting you through this difficult time. You may locate bankruptcy attorneys through county legal services that you can find in the government section of your phone book, through legal clinics sponsored by law schools, and through referral panels provided by the county bar association. Oftentimes, credit applications ask if you have ever filed bankruptcy, not just if you have filed bankruptcy in the last 10 years. It is paramount that you understand the consequences and look at all of your options in reducing your debt before you choose bankruptcy. While some debts will be eliminated, others, such as alimony and child support, will not be. So, besides looking at the amount of debt, you must also look at the type of debt you have in deciding whether bankruptcy is right for you.

If you are considering filing for bankruptcy, I recommend hiring a lawyer who is an expert in bankruptcy law. The attorney’s fees and payment plan should be established ahead of time, and it is important that the lawyer communicates well with you. If you don’t have a good emotional connection with the lawyer you interview, move on to another interview since it is necessary to find someone capable of assisting you through this difficult time. You may locate bankruptcy attorneys through county legal services that you can find in the government section of your phone book, through legal clinics sponsored by law schools, and through referral panels provided by the county bar association.