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Bankruptcy is not a cure all. It may or may not help you
Americans have a record amount of debt and remain notoriously poor savers. It’s so much easier to buy whatever you want now with a credit card and worry about how you are going to pay for it later. It seldom occurs to people to save their money and pay cash when they could use the credit card and get it now. That’s fine if you have the discipline to pay off your credit card debt when the bill comes in the mail instead of letting your debts pile sky-high while accruing interest at 20% or 30% per year. What happens if you do this and you lose your job, have an accident or are struck by a lengthy illness? What do you do then if you cannot pay your bills?
As tens of thousands of people discover each year, you can arrange to have all of your personal debts wiped out by filing for bankruptcy. Federal law permits people who have demonstrated that their debts far exceed their ability to pay to have their debts eliminated through bankruptcy. The debts are forgiven, the creditors have to write them off as a loss, and the consumer is given free reign to start his or her financial life over again. The process isn’t painless; since 2005 the regulations regarding who can file and how it is done have become far more cumbersome. Worse, the fees for filing for bankruptcy have increased, and may do so again. Attorneys who handle bankruptcy cases have become swamped with work and are charging higher rates than ever. While it is possible to file for bankruptcy and get debt relief, it is far from easy.
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