Filing for bankruptcy means that you can’t pay off your debts at all. There are two possible ways that will provide you relief. Either the bankruptcy court will remove all your obligations to repay those debts that you are unable to pay (chapter 7) or chapter 13 which involves a 3-5 year plan during which you being the debtor must repay the debt.
Bankruptcy leaves long last effects on your credit reports. It also leaves a negative impression on your ability to receive credit cards and get loans in future. Bankruptcy lasts for next 7 years as a black dot on your credit report. You must not file for bankruptcy unless you encountered with serious bad credit conditions. You can go for other options instead of bankruptcy if you have current accounts.
Substitutes for Bankruptcy
You can ask your creditor to give you amnesties and leniency on certain terms to repay the debt. You can negotiate the repayment terms with your creditor and discus your bad financial condition with him. After sharing your bad financial conditions with your creditor ask him to reduce the higher interest rates and payments. Contact all your creditors and try to convince them on your bad financial circumstances. Don’t be disappointed if they don’t agree on your terms and try to search for other creditor that is interested in working with you.
