With consumer debt at an all time high, owing money can seem overwhelming. Many people have looked into the internet and have seen advertisements touting debt relief as a quick fix. Enticing as these ads may seem, it is important to be on the lookout for the validity of the claim.

Is Bankruptcy My Best BetA good deal of these promise a quick fix, but that quick fix might be bankruptcy. Yes, bankruptcy is one way to address your financial problems, but in most cases it should be a last resort. The fact that you filed for bankruptcy stays on your credit report for ten years which means that your chances of getting a place to live, credit or employment or insurance are significantly lowered.

It’s always a good idea to consider other options before deciding to file for bankruptcy. Talk with your creditors. Many times a re-payment plan can be worked out that is modified or can be paid in installments. Credit counseling services can work with you and your creditors to make debt repayment plans.

When you are thinking about a second mortgage, be cautious. These loans will require your home as collateral. Bankruptcy also has the capacity to stop foreclosures, debt collection activities and it may get rid of unsecured debts. Exemptions are provided that let you keep certain assets. However, personal bankruptcy does not usually take away child support, fines, taxes, alimony and in a few cases student loans.

It will not usually let you keep your property if your creditor has a security lien or mortgage that has not been paid yet. A somewhat recent tweak in bankruptcy laws creates certain hurdles that you must overcome before you can even file for bankruptcy, no matter what type of bankruptcy. First, you must get credit counseling from an organization approved by the government within six months before filling. Additionally, in certain cases you have to pass a test that requires that you confirm that your income doesn’t exceed a certain amount.

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