If you are in a financial situation where you have tried the alternatives and still have not been able to get back on track financially, then bankruptcy may be a practical solution for your financial situation. However, bankruptcy should be a last resort as it has long-lasting effects on your credit.
If you have tried working with your creditors and are getting nowhere, are facing a foreclosure, want to save your home and the mortgage company has not provided any viable solutions or if you have medical bills that are creating an economic hardship and tremendous financial strain, then your best answer may be to file a bankruptcy. However, the best way for you to know, would be to contact a bankruptcy attorney in your area and have your particular financial situation evaluated.
Bankruptcy refers to the federal law that allows individuals, and certain entities, to obtain permanent relief from many debts and obligations. The intent of the bankruptcy law is to enable debtors to get a "fresh start" in their financial affairs. Bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far reaching. People who follow the bankruptcy rules receive a discharge - a court order that says they don't have to repay certain debts. However, bankruptcy information (both the date of your filing and the later date of discharge) stay on your credit report for 10 years, and can make it difficult to obtain credit, buy a home, get life insurance, or sometimes get a job. Still, bankruptcy is a legal procedure that offers a fresh start for people who have gotten into financial difficulty and can't satisfy their debts.
Many people face a financial crisis at some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn't have to go from bad to worse. You should consider realistic budgeting, credit counseling from a reputable organization, debt consolidation, or bankruptcy.
Although the information above is a good indicator as to whether bankruptcy is a practical solution, you should meet with a bankruptcy attorney in your area to determine whether bankruptcy is your "best answer".
I hope you found this information helpful.