Dealing With Debt: Bankruptcy

This year, estimates are that nearly 500,000 Americans will file for bankruptcy. It’s one way to deal with debt, but who should file and how does it work?

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I waited too long. OK? I was at the point of abandoning everything, abandoning the family. Just throwing in the towel. I felt like I had the anchor of the Queen Mary off my back pulling me down.
-Ron Murray, Filed Bankruptcy

Ron Murray’s problems began when he had to take in his grandchildren, two of which needed medical attention. He started charging medical bills to credit cards, got behind… then got beaten up by banks.

“Once I fell behind I was at about 9% interest. Within about 6 months my interest rate jumped from 9 all the way to 37% on one credit card.”
-Ron Murray, Filed Bankruptcy

Ron is hoping to get his slate wiped clean through bankruptcy: essentially asking the court for a fresh start. Estimates are 1.5 million people will do it this year.

Bankruptcy’s not the only way to deal with debt: there are other options… like credit counseling. But there’s a simple way to tell when it’s time to talk to a lawyer:

“When you bring in less money than your bills are every month, and the harassing phone calls just will not stop, it’s probably time to seek bankruptcy counsel, or at least talk to someone about your options.”
-Brett Elam, Bankruptcy Lawyer

Bankruptcy’s not cheap: $1,500 and up. And it will stay in your credit file for 10 years, making it harder (and more expensive) to borrow. Still, if you’re at the end of your rope, don’t hesitate.

“Your lawyers will help guide you through, and do it. Do it for the sake of yourself, for the sake of your family.”
-Brett Elam, Bankruptcy Lawyer

Bottom line? When it comes to dealing with debt, obviously bankruptcy is nobody’s idea of fun. But if it’s what you need, swallow your pride, talk to a lawyer and get on with your life.

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