Debt management and bankruptcy

Bankruptcy can be an ugly word and it puts fear into many people. From a been there done that person I can tell you that bankruptcy is not all that bad. Our family had over $50K in credit card debt and was drowning in a sea of bills. At the time I also had a small business and if it wasn't for the business we would have surely sunk. The business also enabled us to file for chapter 13 bankruptcy rather than chapter 7. Under chapter 13 we were on a payment plan and had to pay back our debt but at a lower % than we owed.

Prior to filing for bankruptcy I called several companies that specialize in Debt Management and was told that we owned too much (as in cars) to qualify for their system. For us bankruptcy was the only option available to us. A friend of mine went though a debt management company where she was able to get her bill collectors to stop hounding her. She did not own her own home so she qualified for their services.

Before jumping into any type of program such as bankruptcy or debt management, investigate your options fully and understand the programs they have to offer.

2 comments:

Original GRITS said...

I'm on the verge of bankruptcy due to medical issues and the inability to work...I wish that debt consolidation would work for me but too much debt and no income of my own. *sigh*

The knowledge lady said...

Medical reasons was the cause of our situation too. The main income earner of the home became permanently disabled and with just one income we unfortunately started to live on the credit cards to pay medical bills and insurance. Bankruptcy was also our only solution. Selling our house and moving to a cheaper state to live made the big difference in the long run.