The American economy has been largely built on a consumer population addicted to and reliant upon credit. Big ticket items like cars, appliances, furniture, and homes have been purchased on borrowed money for decades and it has gradually become the norm to overspend and to utilize the once sacrosanct credit cards for day to day purchases. This has spiraled outward for many people into an overall attitude toward and handling of money that has left them scrambling or unable to make ends meet. When financial obligations are greater than you can afford, it may be time to consider filing for bankruptcy protection under the chapter of the Bankruptcy Code suited to your debt and asset situation.

Making the decision to enter bankruptcy is difficult, primarily because there is a longstanding social disapproval of the practice. But as more individuals and businesses find themselves struggling to cope with unemployment, stagnant wages, and rising interest rates on mortgages, credit cards, and other financial instruments it is becoming an unspoken and necessary step for many. The matter is further complicated by intentional disinformation put forth by debt collectors and other entities and the presence of countless finance gurus and laypersons who offer their opinions unsolicited and sometimes with serious misunderstandings about the subject at hand. (more…)

For many people, it’s no big secret that declaring personal bankruptcy is not necessarily good news, that it definitely is not easy and that it comes with consequences. So as well as considering whether you have alternatives to declaring bankruptcy before you decide to do so, you also need to familiarize yourself with the potential harmful consequences and make sure you know how you will deal with them.

First of all, your financial reputation will be tarnished. Your credit record will carry information ascertaining to your declaring bankruptcy for around ten years. This is going to make it very, very difficult to obtain any kind of finance and in situations you find you are able to get credit, you will find yourself on the receiving end of very high interest rates. You can rebuild good credit, however.

You may also find that your family members and close friends have little sympathy. Many people, particularly those of an older generation, a generation before hire purchase and when everyone only bought what they had the cash for, struggle to understand credit, excessive finance and thus bankruptcy. You may also feel embarrassed about declaring personal bankruptcy and feel that relationships are strained with those who feel let down by this. (more…)