When meeting with potential clients, I am often asked, is personal bankruptcy worth it? These folks come armed with a lot of misinformation from debt settlement companies. As a result, they are confused about the guarantees and costs being offered to eliminate debt. Therefore, I must explain the associated risks and the potential benefits of bankruptcy. Regardless, depending on the person’s situation, bankruptcy can get rid of their creditors. Thus, leaving them with more money. So, the costs associated with a personal bankruptcy can be minimal compared to other routes.
Do What is Best for You
Collection agencies, credit card companies, banks, mortgage companies, and all the various kinds of debt settlement companies have one key message. They tell you that personal bankruptcy is bad for you. They make you feel like a failure and a bad person. Further, they will tell you that bankruptcy will crush your credit score. I find the opposite to be true.
- Personal bankruptcy can improve your credit score. How so? By reducing your debt and improving your debt-to-income ratio.
- Bankruptcy can cost a fraction of what a debt settlement company charges you. And lead you to a better place.
- You are not a failure by putting your and your family’s future ahead of creditors. They really do not care about you as a person in any way, shape, or form.
In other words, do not believe the misinformation. Personal bankruptcy is bad for them. On the other hand, it can be good for you.
Let’s Discuss Your Options
As I wrote in a previous blog, I suggest you reach out to a bankruptcy lawyer before engaging a debt settlement company. Similarly, talk to an attorney before trying to settle debt on your own. Information is power.
Speaking of information, for a personal bankruptcy, there are basically two options. The first is a Chapter 7 bankruptcy. If you qualify for it, you can eliminate 100% of your unsecured debt. If you do not qualify, a Chapter 13 is an option. A Chapter 13 offers long-term relief with an affordable monthly payment plan. Either option will protect you from creditors and scammers.
So, does answer the question – is personal bankruptcy worth it?
If not, call me with for clarification or if you have other related questions.
