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Can I File for Bankruptcy Again? Understanding the Rules and Timing

Filing for bankruptcy can be a lifeline for those overwhelmed by debt. But what if you’ve already gone through the process once and find yourself in financial trouble again? Can you file for bankruptcy a second time? The short answer is yes, but there are specific rules and waiting periods you need to understand.

Filing for Bankruptcy More Than Once: Is It Possible?

Yes, you can file for bankruptcy more than once. The U.S. Bankruptcy Code allows individuals to file multiple bankruptcies throughout their lifetime. However, there are important restrictions and time limits between filings, depending on the type of bankruptcy you filed previously and the type you plan to file next.

How Long Do I Have to Wait to File Bankruptcy Again?

The waiting period between bankruptcy filings depends on the chapters under which you filed and plan to file. Here’s a breakdown:

1. Chapter 7 to Chapter 7

Waiting Period: 8 years from the date of the first filing.
If you previously filed for Chapter 7 bankruptcy and received a discharge, you must wait eight years before you can file for Chapter 7 again. This extended period is designed to prevent abuse of the bankruptcy system.

2. Chapter 7 to Chapter 13

Waiting Period: 4 years from the date of the first filing.
If you initially filed for Chapter 7 and received a discharge, you can file for Chapter 13 bankruptcy after four years. Filing for Chapter 13 after a Chapter 7 discharge is sometimes referred to as a “Chapter 20” bankruptcy. While you won’t be able to discharge your debts in Chapter 13, you can use it to catch up on missed mortgage or car payments.

3. Chapter 13 to Chapter 13

Waiting Period: 2 years from the date of the first filing.
If your previous bankruptcy was a Chapter 13, you must wait at least two years before filing for Chapter 13 again. Since Chapter 13 plans typically last three to five years, this means you can file again almost immediately after your previous case is discharged.

4. Chapter 13 to Chapter 7

Waiting Period: 6 years from the date of the first filing.
If you previously filed for Chapter 13 and received a discharge, you must wait six years before filing for Chapter 7. However, there are exceptions. If you paid back 100% of your unsecured debts or 70% with a good-faith effort, you may be able to file Chapter 7 earlier.

Why Are There Waiting Periods?

The waiting periods between bankruptcy filings exist to ensure that bankruptcy is used as a last resort and not as a regular financial strategy. These rules are meant to encourage individuals to work toward financial stability rather than relying on multiple bankruptcies. Multiple bankruptcies in a relatively short period of time may be considered a form of bankruptcy abuse.

What If I Didn’t Receive a Discharge?

If your previous bankruptcy case was dismissed or you didn’t receive a discharge for some reason (e.g., you didn’t complete the required paperwork, or the court denied your discharge due to fraud), the waiting periods mentioned above don’t apply. You may be able to file again immediately, but the outcome of your case will depend on the reasons for the dismissal or denial.

Considerations Before Filing for Bankruptcy Again

Before deciding to file for bankruptcy again, consider these important factors:

Impact on Credit: Multiple bankruptcies will significantly impact your credit score, which may make it more difficult to obtain loans, mortgages, or credit cards in the future.
Legal and Filing Fees: Filing for bankruptcy multiple times can be costly. Make sure you understand the financial implications, including attorney fees and court costs.
Alternatives to Bankruptcy: Explore other debt relief options, such as debt consolidation, negotiation with creditors, or financial counseling, before resorting to bankruptcy again.

Final Thoughts

Filing for bankruptcy more than once is possible, but it’s important to understand the rules and waiting periods that apply. Bankruptcy can provide relief, but it’s not a decision to be taken lightly. If you’re considering filing again, consult with a bankruptcy attorney to discuss your options and develop a plan that’s right for your financial situation.

By understanding the timing and implications, you can make an informed decision that helps you regain control of your financial future.

Schedule a free bankruptcy consultation with Jennifer Weil, a New Jersey bankruptcy attorney, to discuss your options.

Understanding Bankruptcy Options: Why Chapter 7 May Not Be Available for High-Income Earners in New Jersey and the Viable Alternative of Chapter 13

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Filing for bankruptcy is a significant decision that many individuals facing financial difficulties consider. In New Jersey, like in other states, the type of bankruptcy one can file depends on several factors, including income level. If you are a consumer with a gross income above the median income for your state and household size, you might be ineligible to file for Chapter 7 bankruptcy. Instead, Chapter 13 bankruptcy could be a more suitable option. This post will explore why higher-income earners might not qualify for Chapter 7 and how Chapter 13 serves as an alternative.

Understanding Chapter 7 Bankruptcy

Chapter 7 bankruptcy, often referred to as “liquidation bankruptcy,” allows individuals to discharge most of their unsecured debts. This means debts like credit card balances, medical bills, and personal loans can be wiped out. However, to qualify for Chapter 7, you must pass the “means test,” which evaluates your income, expenses, and overall financial situation.

The Means Test: A Gatekeeper for Chapter 7 Eligibility

The means test is designed to limit the availability of Chapter 7 bankruptcy to those who genuinely cannot repay their debts. Here’s how it works:

Median Income Comparison: First, your gross income is compared to the median income for your state and household size. If your gross income exceeds this median, you move to the next step of the means test.
Disposable Income Calculation: The next step involves calculating your disposable income by subtracting allowable living expenses and secured debt payments from your gross income. If your disposable income is above a certain threshold, you fail the means test and cannot file for Chapter 7 bankruptcy.

Why High-Income Earners Might Fail the Means Test

If your gross income is higher than the median income in New Jersey for your household size, it’s likely that you will not qualify for Chapter 7 bankruptcy. This is because the means test assumes that individuals with higher incomes have the financial capacity to repay at least a portion of their debts. Therefore, high-income earners are often steered towards Chapter 13 bankruptcy instead.

Chapter 13 Bankruptcy: A Structured Repayment Plan

For those who cannot qualify for Chapter 7, Chapter 13 bankruptcy offers a structured way to manage and repay debts. Here’s how Chapter 13 differs and why it might be a better option:

Repayment Plan: Unlike Chapter 7, Chapter 13 does not discharge all debts immediately. Instead, it involves creating a repayment plan that spans three to five years (5 years if your income is over median), allowing you to pay off your debts over time based on your disposable income.
Protection of Assets: Chapter 13 allows you to keep your property, as long as you adhere to the repayment plan. This can be particularly beneficial if you have significant assets or secured debts, such as a home mortgage or car loan, that you wish to retain.
Debt Consolidation: Under Chapter 13, your debts are consolidated into one monthly payment made to a bankruptcy trustee, who then distributes the funds to your creditors. This can simplify the repayment process and make it easier to manage your finances.

Advantages of Chapter 13 for High-Income Earners

For individuals with incomes above the state median, Chapter 13 offers several advantages:

Debt Management: Chapter 13 provides a manageable way to pay off debts without the pressure of immediate liquidation; it can protect you from the lawsuits of your creditors, unlike debt settlement.
Credit Impact: While bankruptcy will impact your credit, Chapter 13 may be seen as less severe than Chapter 7 since it involves repaying your creditors over time.
Legal Protection: Filing for Chapter 13 triggers an automatic stay, which halts all collection actions, including foreclosure, repossession, and wage garnishment, giving you time to reorganize your finances.

Conclusion

If you are a higher-income earner in New Jersey struggling with debt, understanding your bankruptcy options is crucial. While Chapter 7 might seem appealing due to its debt discharge feature, failing the means test because your income is above the median could disqualify you. However, Chapter 13 bankruptcy offers a viable alternative, providing a structured repayment plan that allows you to manage your debts effectively while protecting your assets. Consulting with a bankruptcy attorney can help you navigate the complexities of the bankruptcy process and choose the best option for your financial situation.

By exploring Chapter 13 as an alternative to Chapter 7, high-income earners can find relief from debt while maintaining a path toward financial stability. Schedule a free bankruptcy consultation with Jennifer Weil, a New Jersey bankruptcy attorney, to discuss your options.

Navigating Bankruptcy Choices: Deciphering Chapter 7 vs. Chapter 13

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Introduction

For the person who is facing financial turmoil, the decision to file for bankruptcy is one fraught with complexity and nuance. Amidst the myriad considerations, understanding the distinctions between Chapter 7 and Chapter 13 bankruptcy is paramount. In this comprehensive guide, we’ll unravel the intricacies of these two bankruptcy chapters, equipping you with the knowledge to make a well-informed decision tailored to your unique circumstances.

Chapter 7 Bankruptcy: The Liquidation Option

Chapter 7 bankruptcy, often referred to as “liquidation bankruptcy,” entails the liquidation of non-exempt assets to settle debts. This option is ideal for individuals seeking a fresh start without the burden of a repayment plan. People who are facing overwhelming debt may find Chapter 7 appealing for its expediency and potential for a swift resolution.

Determining Eligibility for Chapter 7

Individuals considering Chapter 7 must meet certain eligibility criteria, including passing the means test. This test evaluates your income relative to the median income in your state and determines your ability to repay debts. Understanding your eligibility is crucial in determining whether Chapter 7 is a viable option for your financial situation.

Pros and Cons of Chapter 7

Pros: Quick resolution, discharge of most unsecured debts, immediate relief from creditor harassment.
Cons: Potential loss of non-exempt assets, limited options for debt repayment, impact on credit score.

Chapter 13 Bankruptcy: The Repayment Solution

Chapter 13 bankruptcy, often termed “reorganization bankruptcy,” involves creating a structured repayment plan to settle debts over a period of three to five years. This option is suitable for people with a steady income who wish to retain their assets and repay debts over time in a manageable way.

Crafting a Repayment Plan:

In Chapter 13 bankruptcy, an experienced bankruptcy attorney will evaluate any non-exempt assets and their client’s income to help develop a feasible repayment plan. Some negotiation with the bankruptcy trustee may be involved. This plan outlines how debts will be repaid, typically prioritizing tax debts and secured debts while accommodating essential living expenses.

Pros and Cons of Chapter 13:

Pros: Protection of assets, opportunity to catch up on mortgage or car payments, potential to discharge certain debts upon completion of the repayment plan.
Cons: Lengthy process, strict adherence to repayment plan, potential for higher overall payments compared to Chapter 7.

Determining the Best Option

Sophisticated individuals evaluating bankruptcy options must conduct a thorough assessment of their financial situation, considering factors such as income, assets, debts, and long-term financial goals. Consulting with a knowledgeable bankruptcy attorney is invaluable in navigating the complexities of Chapter 7 and Chapter 13, as well as exploring alternative solutions.

Making an Informed Decision

Ultimately, the decision to file for Chapter 7 or Chapter 13 bankruptcy hinges on a careful evaluation of the benefits, drawbacks, and suitability of each option to your unique circumstances. Bankruptcy can be used as a strategic tool to regain financial stability and pave the way for a brighter financial future.

Conclusion

Navigating the choice between Chapter 7 and Chapter 13 bankruptcy demands a nuanced understanding of each option’s implications. For the sophisticated individual, making an informed decision entails assessing eligibility, weighing the pros and cons, and aligning the chosen path with long-term financial objectives. With the guidance of a seasoned bankruptcy attorney, you can embark on the path towards financial recovery with clarity, confidence, and sophistication.

Schedule a free bankruptcy consultation with Jennifer Weil, a New Jersey bankruptcy attorney, to discuss your options.

When Should You File For Bankruptcy?

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Introduction

The decision to file for bankruptcy is a pivotal moment in anyone’s financial journey, requiring careful consideration and evaluation of one’s circumstances. In this comprehensive guide, we will explore the key factors and considerations that can help individuals determine the right time to file for bankruptcy.

**1. Overwhelming Debt Burden:

Indicators: The primary signal that it might be time to file for bankruptcy is when the burden of debt becomes overwhelming, making it nearly impossible to meet monthly obligations. If juggling multiple debts, including credit cards, medical bills, and loans, feels unmanageable, it may be time to consider bankruptcy.
Consideration: Assess the total amount of debt, the types of debts involved, and whether efforts to negotiate with creditors or implement a debt management plan have proven ineffective. If the debt load remains insurmountable, bankruptcy might be a viable solution.

**2. Constant Harassment from Creditors:

Indicators: Persistent calls, letters, and threats from creditors and collection agencies can be emotionally and mentally taxing. If creditor harassment has become a constant presence, impacting daily life and well-being, it could be a sign that bankruptcy is worth exploring.
Consideration: Take note of the frequency and intensity of creditor harassment. If efforts to negotiate or settle debts have not alleviated the pressure, bankruptcy’s automatic stay can provide immediate relief, putting an end to collection actions.

**3. Facing Legal Actions:

Indicators: If creditors have initiated legal actions such as wage garnishments, lawsuits, or foreclosure proceedings, it may be a critical juncture to consider bankruptcy. Legal actions can have serious implications, and filing for bankruptcy can halt these processes.
Consideration: Assess the stage of legal actions and their potential impact. Bankruptcy, especially Chapter 7 or Chapter 13, can offer a legal shield against further actions and provide an organized framework for addressing outstanding debts.

**4. Impact on Quality of Life:

Indicators: When financial challenges start affecting one’s quality of life, including housing stability, access to necessities, and overall well-being, it’s a strong indication that bankruptcy might be a necessary step.
Consideration: Reflect on how financial struggles are impacting day-to-day life. If meeting basic needs becomes increasingly difficult and stress levels are high, bankruptcy can provide the breathing room needed to regain control.

**5. Exhausted Alternatives:

Indicators: If alternative methods such as debt consolidation, negotiation, or credit counseling have been exhausted without delivering sustainable relief, it may be time to explore the structured approach that bankruptcy offers.
Consideration: Evaluate the effectiveness of previous attempts to manage or reduce debt. If these efforts have proven futile or unsustainable, bankruptcy provides a legal framework for a fresh start.

Conclusion: Empowering Financial Recovery: Deciding when to file for bankruptcy is a deeply personal and complex choice. It involves a thorough evaluation of one’s financial situation, emotional well-being, and future prospects. Seeking guidance from a qualified bankruptcy attorney can provide valuable insights and assistance in determining the most suitable time to file. While bankruptcy is a significant step, it can be a powerful tool for those seeking a path to financial recovery and a brighter financial future.

Schedule a free bankruptcy consultation with Jennifer Weil, a New Jersey bankruptcy attorney, to discuss your options.

Are You Considering Debt Adjustment in NJ? Read This First!

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If you’re struggling with debt in New Jersey, you may have heard about debt adjustment as a way to get relief. Debt adjustment, also known as debt settlement, is a process where you negotiate with your creditors to settle your debts for less than you owe. However, it’s important to understand the laws around debt adjustment in New Jersey before deciding if it’s the right choice for you.

First, it’s important to know that debt adjustment companies are required to be licensed by the New Jersey Department of Banking and Insurance. These companies must follow specific regulations and guidelines to ensure that they’re acting in the best interest of their clients. It’s crucial to research and choose a licensed debt adjustment company to ensure that you’re working with a reputable organization.

Second, it’s important to understand the fees associated with debt adjustment. While debt adjustment companies can only legally collect their fees once they’ve successfully settled your debts, many of them charge high fees along the way that may not be adequately disclosed up front.

Third, it’s important to know that debt adjustment companies can’t guarantee that they’ll be able to settle your debts. It’s important to have realistic expectations and understand that settling your debts can take time and may not be possible in every case. These companies also cannot protect you from debt collection lawsuits.

Finally, it’s important to consider the potential impact on your credit score. Debt settlement can have a negative impact on your credit score, and it’s important to understand the consequences before deciding to pursue this option.

In conclusion, debt adjustment can be a viable option for debt relief in New Jersey, but it’s important to understand the laws and regulations surrounding this process. Working with a licensed debt adjustment company and having realistic expectations can help ensure a positive outcome. If you’re considering debt adjustment as a solution to your debt problems, consult with an experienced debt relief attorney to discuss your options and determine the best course of action for your specific situation.

Schedule a free telephone appointment to discuss your unique debt situation with attorney Jennifer Weil at my Setmore page.

Why Bankruptcy is a Better Option Than Debt Settlement

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When it comes to managing overwhelming debt, many individuals may consider debt settlement as a way to negotiate a lower payoff amount with creditors. However, bankruptcy may actually be a better option in many cases. In this post, I will explain why bankruptcy is a better option than debt settlement.

Legal Protection. Bankruptcy is a legal process that provides individuals with protection from creditors and debt collectors. When a person files for bankruptcy, an automatic stay goes into effect, which stops creditors from contacting the individual and pursuing further collection actions. On the other hand, debt settlement does not provide the same level of legal protection and creditors may still be able to pursue collection actions.
Faster Resolution. Debt settlement can take months or even years to negotiate a lower payoff amount with creditors. In contrast, bankruptcy can often provide a faster resolution to debt problems, with most Chapter 7 bankruptcies being complete within a few months.
Wider Debt Relief. Debt settlement typically only addresses unsecured debts, such as credit card bills and medical bills. Bankruptcy, on the other hand, can provide relief for a wider range of debts, including secured debts such as mortgages and car loans, and priority debts such as back taxes and child support.
Better Outcome for Creditors. While debt settlement may seem like a better option for the individual, it may actually have a negative impact on creditors. In many cases, debt settlement companies only negotiate a portion of the debt owed, and creditors may receive less money than they would have in a bankruptcy scenario.
Fresh Start. Bankruptcy provides individuals with a fresh start by discharging most unsecured debts and allowing them to begin rebuilding their financial future. On the other hand, debt settlement may leave a negative mark on a person’s credit report and make it difficult for them to obtain new credit in the future.

In conclusion, bankruptcy is a better option than debt settlement for individuals who are struggling with debt. It provides legal protection, a faster resolution, wider debt relief, a better outcome for creditors, and a fresh start. If you are struggling with debt, consider speaking with a New Jersey bankruptcy attorney to see if bankruptcy is right for you. Book a free telephone consultation here: https://jenniferweil07030.setmore.com/

How To Solve Your Debt Problems: Making the Decision

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Many people will tell you that one type of solution for debt problems is better than others for several reasons: They’ll say that one solution is the best for your credit report; that one solution is cheaper than others; and even that morality favors one solution over others.

Considering Your Options

But when you are considering what to do about our overwhelming debt, it’s best to consider all of your options. That’s the only way to know what works best for you. You’ll want to avoid the disappointment that happens after you decide on an option and implement it, only to discover that it wasn’t the right way to go, especially after finding out about another solution that would’ve been a lot better.

When you’re solving debt problems, you need to consider all the relevant information up front in order to decide what’s right for you. Once you’ve chosen a path to solve those debt problems, it’s difficult, if not impossible, to go back and opt for a different solution.

How to Find The Right Solution For You

Finding the right solution means examining your entire financial situation, looking at everything you own and everything you owe. Then look at how all the available solutions would apply to your situation. Don’t leave out any potential solutions, no matter how crazy they sound: Compare the likely results of debt settlement, Chapter 7 bankruptcy, Chapter 13 bankruptcy, and of doing nothing at all. What are the effects of each solution on your overall financial health? On your credit? How much could each one cost, both over the long term and over the short term?

How To Gather Information

Make sure that you’re examining and comparing the facts of how each solution actually applies to your situation, not your hopes and fears around each of them. Get advice from people who know what happens when each solution is applied to your type of financial situation. Talk to someone who actually settles debts, not just someone who used a debt-settlement company or who works to sell a company’s debt-settlement services. Find out if that debt-settlement company you’re considering is operating legally in the State of New Jersey.

Talk to one or more bankruptcy attorneys. Find out if you qualify for bankruptcy. Find out what would happen to your financial situation under each of the different chapters of bankruptcy. Ask them what might happen if you sat back and did nothing. It might sound crazy, but doing nothing is a viable solution for some people.

When To Lay Out Your Hopes And Fears

Only after you objectively consider the facts, can you decide whether your hopes and fears are grounded in fact. Do your research. Talk to professionals who have seen situations like yours and who have seen the outcomes of the various solutions. Then decide.

If you need to speak with a professional who has helped others file bankruptcy, settle debts, and guided others in doing “nothing” about their debts, call and schedule a phone consultation with attorney Jennifer Weil at (201) 676-0722 or schedule your own phone call at my Setmore page.

Struggling to Make Minimum Credit Card Payments? Explore Your Options

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Struggling to make minimum payments on your credit card debt and unable to save any money? You may want to consider bankruptcy as an option for debt relief. If your credit card debt has become overwhelming, debt settlement and bankruptcy are the two main options for financial relief.

While debt settlement may seem like an attractive option, it can often be more expensive than bankruptcy. You will have to pay back at least a portion of your debt, and there’s no protection from debt collection lawsuits.

On the other hand, filing for bankruptcy offers protection from debt collection activities such as lawsuits. With Chapter 7 bankruptcy, you may be able to have your entire credit card debt discharged for the cost of attorney fees and filing fees. If you file for Chapter 13, you’ll pay back a portion of your debt under the protection of bankruptcy from debt collection activity.

It’s important to weigh your options and consider the financial and legal implications before making a decision on debt relief. Contact a bankruptcy attorney to discuss your options and determine if bankruptcy is the right choice for you.

Do you have questions about whether you should file for bankruptcy? Schedule a phone consultation with attorney Jennifer Weil on the Setmore page.

Bankruptcy helps avoid tax due on forgiven debt

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Introduction

Discovering that a debt, such as credit card balances, has been forgiven can be both a relief and a potential tax concern. The IRS terms this forgiven debt as “canceled debt” or “forgiveness of debt income.” Understanding the implications and exploring viable solutions is crucial to managing your financial landscape effectively.

Identifying Canceled Debt with Form 1099-C

Receiving a Form 1099-C, titled “Cancellation of Debt,” signals that one of your debts has been forgiven. The IRS mandates reporting the canceled debt amount on your annual tax return. This document serves as a key indicator that you need to be vigilant about your tax obligations.

Not All Canceled Debt Equals Immediate Tax Liability

While the arrival of a 1099-C might suggest additional income, it doesn’t automatically translate into owing more taxes. Various exceptions and exclusions exist, offering potential relief from counting canceled debt as income. Bankruptcy stands out as a powerful method to exclude this “extra income,” but timing is crucial – filing for bankruptcy must precede the debt cancellation.

Risk Factors of Canceled Debt: Debt Settlement and Negotiation

Debt settlement or negotiation poses a high risk of triggering canceled debt and, subsequently, a 1099-C. Engaging with companies that promise to eliminate your debt at a fraction of the cost or negotiating debt independently may lead to a canceled debt scenario. This realization underscores the importance of considering bankruptcy over debt settlement.

Bankruptcy as a Shield Against Tax Implications

Opting for bankruptcy instead of debt settlement emerges as a strategic move to shield yourself from potential tax liabilities. A bankruptcy consultation provides an opportunity to explore both bankruptcy and non-bankruptcy options, allowing you to make an informed decision aligned with your financial goals. There is more detailed information about cancellation of debt income and how the IRS views it on the IRS website.

Conclusion

In the realm of canceled debt and potential tax consequences, bankruptcy emerges as a reliable shield. It not only excludes canceled debt from taxable income but also offers a comprehensive approach to managing financial challenges. Consider a bankruptcy consultation to navigate your options wisely, ensuring a strategic and informed decision-making process. When was the last time a debt settlement company provided such a holistic perspective? [Answer: Never]

Schedule a free bankruptcy consultation with Jennifer Weil, a New Jersey bankruptcy attorney, to discuss your options.

Debt settlement isn’t usually the best option

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Looking at debt settlement to help rid yourself of credit card debt?

Credit cards are a huge problem in the U.S. A May 21st New York Times article reported that the Standard & Poor’s/Experian Consumer Credit Default Indices shows that the default rate on credit card loans recently climbed to its highest point, 9.14 percent, since the index first began in 2004.

So more people are no longer paying their credit card bills. What are those people who’ve stopped paying on their credit cards doing about their credit card debt?

Hopefully, they’re not paying a debt settlement company to try and “get out of debt.” There are a few cases where using a debt settlement company may be appropriate, but not many. Many debt settlement companies take large fees and tell you to stop paying on your credit card bills. They take monthly payments from you for a long time. Then they make offers to your credit card companies to settle your debts.

Sound like something you can do by yourself without paying the high fees? Yeah, there’s a reason for that – it is.

But many people who are taking the debt settlement route should consider bankruptcy instead. If you’re thinking about pursuing the debt settlement route, ask yourself, “why did I decide that bankruptcy wasn’t for me?” Was it fear? A belief that bankruptcy is too difficult?

You owe it to yourself – and your financial health – to first take the time to do some research. Look around online. The bankruptcy courts have their own websites with plenty of information for potential filers. It can’t hurt you to take the time to educate yourself. You need to know what the potential benefits of bankruptcy are before you commit to the high fees charged by a debt settlement company.

Photo by Alan Cleaver.