Posted on June 1, 2009 at 8:12 am How bad does it need to get before someone should file for bankruptcy?

Posted on June 1, 2009 at 8:58 am I need to prefice by stating that I am not an attorney and the following does not constitute legal advice. I would say that bankruptcy should be a last resort for people who are struggling with unsecured debt such as credit cards, lines of credit or personal loans. Usually, it is only those who are behind on a mortgage or car note (or other secured debt) as well as their unsecured debts who file bankruptcy since it may be the only way the person can keep their asset(s). For these individuals, after exhausting all of their financial resources and budgeting to the best of their ability, bankruptcy may be the only way to find relief as secured debts are non-negotiable. For people who are struggling with credit card debt, lines of credit or personal loans only, credit counseling and debt settlement programs may be a better alternative. These companies are able to work with creditors and collection agencies in an attempt to lower interest and/or principle debt amounts, which allows the individual to pay off their debt faster without filing bankruptcy. Furthermore, these bankruptcy alternatives have less of a negative impact on a person's credit. Fill out a form on DestroyDebt.Com to find out what options may be suitable for you.

Posted on June 1, 2009 at 10:58 pm Steven is right - bankruptcy should definitely be a last resort, but a lot of people who just have credit card debt still use it as a solution to their debt problems.  Obviously some people throw in the towel too quickly, but there are still some circumstances when you should probably file. (1) You're unemployed (2) You can't afford to pay more than 1.5% of your monthly payment in a debt relief program like debt settlement.  That's the bare minimum one can pay and effectively settle their debt.  If you pay less, chances are your debts will either grow too large because of tacked on interest or you'll be sued before you ever get a chance to settle.  (3) The majority of your unsecured creditors won't work with a debt settlement or credit counseling agency.  Discover and Capital One tend to be very aggressive with people who are past due on their payments, so settlement may not be your best option if these are your debts.  Last I heard American Express wasn't working with credit counseling agencies anymore - can someone confirm this? That's all I can think of for now.  Does someone want to add to this?

Posted on June 2, 2009 at 9:05 am People who have student loan debt that is secured by the government and are having serious trouble paying it back. Chapter 13 Bankruptcy gives these people a chance to catch up on past due payments and set up affordable repayment terms based on the individual's income and expenses.

Posted on June 15, 2009 at 12:57 pm I have also heard that American Express is not working with credit counseling agencies anymore. This will create a huge problem for a lot of people. I also heard that Bank of America often refuses to work with credit counseling agencies too. If that is the case, and you have a lot of debt with these creditors, you may want to consider debt settlement as a bankruptcy alternative. You can fill out a form on DestroyDebt.Com to get matched up with a qualified provider.

Posted on June 24, 2009 at 2:54 pm So do you think that someone like me, who only has a few thousand dollars in credit card debt should not even think about bankruptcy? The problem is my hours just got cut at my job and I am concerned about keeping up. Thanks in advance for any advice you can give me.

Posted on June 24, 2009 at 3:04 pm It is unlikely that filing bankruptcy would be your best option. If you do fall behind, you should consider negotiating with your creditors in an attempt to settle the debts. If you are not comfortable doing that on your own you can fill out a form on the website to get some help as I previously mentioned.

Posted on July 7, 2009 at 7:07 am So who should file for bankruptcy then if it is a last resort Steven?

Posted on July 8, 2009 at 3:16 am - If all your creditors refuse to negotiate with you- If you are out of a job / have no source of income or assets- If you want to keep your IRA

Posted on July 10, 2009 at 4:39 am Who should file bankruptcy? Since it should be the last debt relief option for anybody..file bankruptcy only:If you need the automatic stay protection. Although it only temporarily halts all collection activities against you..it would still give you time to save your assets (your house for example, if it's facing foreclosure)