How To Avoid Bankruptcy

Written by Abby Luttrell
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If you're deeply in debt, you may be considering bankruptcy. It sounds so tempting to have all your debts erased, all your burdens lifted. If you're waking up in the middle of the night worrying about money, it may seem like the only answer.

Bankruptcy Doesn't Have The Answers

However, one thing to remember is that bankruptcy will only take care of certain debts. The court decides which debts to erase, and under what terms. Also a bankruptcy judgement will not erase a tax lien against your home or reverse a car repossession.

A bankruptcy is probably the worst mark on your credit rating. A bankruptcy is on your credit report for 10 years, and it can make it difficult to acquire credit in the future, buy a car or home, get life insurance, or even to get a job. If you are in a bad financial situation, your focus should be on how to avoid bankruptcy.

Your focus should also be debt consolidation. The debt consolidation process will allow you to pay off all your bills at a much reduced interest rate, and even more importantly, keep all your present possessions and assets which could be taken in a bankruptcy proceeding. Consumer credit counseling will help you learn how to avoid bankruptcy, stop creditors and improve your credit.


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