A good or bad choice?

Is bankruptcy a good choice for you?

Everyone has money woes to some extent, and filing for bankruptcy in court is clearly an answer that is best used as a last resort. Court-mandated bankruptcy is not something you ought to jump into, but with the changes in the law taking place recently, now would be a good time to analyze your circumstances. Very little has been written about whether or not debt relief filing is a good way to go and what criteria might help an individual make a decision regarding whether or not to file. A debt relief application stays on your credit report for many years, hurts your credit score and can make it tough to find a job, a place to live or a favorable loan. A lot has been written about the recent bankruptcy law and how it will affect individuals with problem debt.

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bankruptcy customer

Listed below are a couple of suggestions that might help you decide if bankruptcy is a good step for you.

You possess more than two charge cards with existing balances - If you have outstanding balances on more than two major charge cards, you are almost certainly borrowing more than you can afford to pay back. Charge cards are a useful tool and a way to make a purchase when you do not have the funds handy. Credit card loans are a smarter choice than quick cash loans, but are still not a good way to borrow cash. Charge cards shouldn't be a source of funds, as they represent a relatively pricey way to borrow money. Credit cards work best as a brief loan.
 

You are making the minimum payments only on your charge cards - If you are only paying the minimum on a large balance you're in over your head. If you have a $10,000 or more outstanding balance and you've been paying $200 per month, it's going to double to $400. New laws urge the bank card companies to have you repay your balance in a "reasonable" amount of time which has resulted in a doubling of minimum payments.

You are writing personal checks without money in your checking account to cover them - Individuals often write checks a few days before payday, hoping that the "float" will keep them out of trouble until the money gets added into their checking account. There actually is no transaction time anymore; checks clear almost immediately. There are a number of problems with writing personal checks with not enough funds - new electronic handling systems have sped up the time a check takes to clear and it is a crime. A returned check only adds to your trouble as you may trigger fees from both your own credit union or bank and the payee.

You are paying the bill for one charge card by taking a cash advance on another - If you're taking cash from one lender at 20% to pay another at 20% and you are paying a cash loan fee as well, you're probably in over your head. Taking a cash advance from Visa to pay your Mastercard bill isn't an indicator of sound fiscal living.

These are a few of the tips that you might be in enough financial trouble to justify a filing; do you qualify?
 

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