Many Experts Overlook Bankruptcy Filing As a Form of Debt Elimination


When it comes to bankruptcy filing many experts spend a lot of time on television talking about the negative effects of the process. In interviews they will typically only talk about the negatives of someone filing for bankruptcy. It's almost like they're in the back pocket of the creditors. Many of them will discuss the possibilities of becoming debt-free by budgeting one's finances. The problem is, for some individuals it is just too late. When someone makes $40,000 a year and has $25,000 in credit card debt budgeting will not get them out of debt. For this individual debt settlement probably wouldn't work unless creditors would be able to accept 10 or 20% of the balance owed. As a rule of thumb, debt settlement companies will offer around 50% of the amount owed. If someone has a balance of more than $10,000, it doesn't make sense to use debt settlement. It will cost the individual over $5000 and the impact on your credit will be similar to that of a bankruptcy filing. Most creditors will report a settled account as a charge off which will stay on one's credit report for seven years or more.

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In today's economy many Americans only hope is to file bankruptcy to eliminate their debt. It's irresponsible for the quote unquote media financial experts to bash bankruptcy filing as a form of debt elimination. People in severe financial distress need to be encouraged during this time and not scared out of their socks. Many rumors about filing bankruptcy started from these television shows and so-called financial experts that tell only a partial truth. Sure it is true that a bankruptcy filing will leave the Scarlet B on one's credit report, but what would they rather have a Scarlet B or be in bondage to their debt for life? Most people leave a typical Chapter 7 bankruptcy being almost completely debt-free. That is at least from all unsecured debt. Truth be told, filing Chapter 7 bankruptcy only takes about 4 to 6 months from beginning to end and allows individuals to regain control of their financial future.

When digging a little deeper, an individual should compare their overall cost of whatever form of debt elimination that they plan on using. Taking a look at the total costs of debt elimination a person will quickly find out that a bankruptcy filing is probably the best value available. All a person needs to do is add up their debt and divide it by the cost of hiring a bankruptcy attorney and court fees. At that time they will easily understand the true value of a bankruptcy filing. Percentage wise, if a person has a large amount of unsecured debt, there is nothing that compares to filing Chapter 7.


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