Bankruptcy: A Last Resort
The decision to file for bankruptcy involves a variety of circumstances and tough choices. Weigh them carefully.
The decision to file for bankruptcy involves a variety of circumstances and tough choices. Weigh them carefully.
Filing for bankruptcy has significant consequences, such as a long-term negative impact on creditworthiness, according to the Federal Trade Commission (FTC). Bankruptcy information — the date of your filing and the later date of discharge — remains on your credit report for a decade. It can also limit your ability to get credit, a job, insurance or even a place to live, the FTC adds.
The FTC offers the following tips to consider before filing for bankruptcy:
They may be willing to work out a modified payment plan.
These organizations work with you and your creditors to develop debt repayment plans. Such plans require you to deposit money each month with the counseling service. The service then pays your creditors. Some nonprofit organizations charge little or nothing for their services.
before you take out a second mortgage or home equity line of credit. While these loans may allow you to consolidate your debt, they also require your home as collateral.
