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Bankruptcy is not something that you do on the spur of the moment, but rather it should be a well thought out plan that you only implement when you have exhausted all other possibilities. While bankruptcy may provide a way out of your current financial situation, you need to consider and be aware that the ramifications of filing bankruptcy are going to haunt you for the next 7 to 10 years. Many people who file bankruptcy are doing so to make things better “now” but they are not looking years down the road, and when they do and wish they had considered other options, it is then too late.

If you are on the very edge of filing bankruptcy and need a way out, there are multiple other options that may be available to you. If you feel like you’re hopelessly buried in debt and you have very few assets, filing for bankruptcy may not be the answer to ending your financial problems. Though it sounds like an easy and attractive solution for one’s financial problems, bankruptcy should be the last option any individual should resort to.

Throughout the process of filing for bankruptcy, it is a good idea to have a lawyer represent you through all formal bankruptcy proceedings. Unless you yourself are very familiar with bankruptcy law, especially the variations of the law within your state, it is more than just a good idea to have a bankruptcy lawyer represent you; it is almost a necessity so that you don’t accidentally get yourself into worse trouble than you are right now. From start to finish, the process of filing for bankruptcy is much different than it has been in decades past, and a good bankruptcy attorney knows those pitfalls and can navigate around them.

Before taking the big step and filing for bankruptcy, you will need to do some reading, especially so that you can explain to your bankruptcy attorney the reason for considering bankruptcy. You may need to consider filing bankruptcy if your expenses are increasing because of divorce, job loss, or medical bills, while your income is decreasing because of the same reason. There are various good reasons for filing bankruptcy, but there are also many BAD reasons for filing bankruptcy, based on the ease with which one could do that in years past, but most of those loopholes have been closed, and it is not nearly as easy today to file a non-painful bankruptcy case.

If you have decided there is no alternative to filing bankruptcy, you may be asking yourself, “how do I find a good bankruptcy lawyer? If you have exhausted all other resources and still feel bankruptcy is your only viable option you can learn more about filing bankruptcy or buy do it yourself bankruptcy forms. If you’re unemployed, on public assistance, have little or no money in a bank account, don’t own an automobile, or rent or live with others, filing for bankruptcy may do little to improve your financial situation. The bankruptcy judge is going to want to see a plan of how you plan to change your current situation so that you are not back in the same position in another few years, so be sure that you discuss a financial plan with your bankruptcy lawyer.

In the 21st century, many men and women find themselves struggling to keep their heads above water financially. With ever mounting debt, these people oftentimes need to seek relief by filing for bankruptcy. Perhaps you are such a person who is fighting to make ends meet. As a result, you may be wondering how to file for bankruptcy.

The first step in learning how to file for bankruptcy is to make a comprehensive list of all of your creditors and outstanding debts. When you are working to determine how to file for bankruptcy, you need to appreciate that if you to proceed with a bankruptcy case, you must be sure that all of your debts are disclosed and listed in a bankruptcy petition.

The next step in filing for bankruptcy is to determine exactly what assets you have available to you. Your assets include your recurring income from your job, your home and major items of personal property that you might own (including such items as motor vehicles).

The third step you need to undertake when it comes to seeking bankruptcy relief is to contact all three major credit bureaus. When all is said and done, the three major credit bureaus may have the best record of all of your outstanding debt. By obtaining your credit reports from the three major credit bureaus, you will be able to cross reference your list of debt to make certain that you have all accounts covered and listed.

The forth factor that needs to be considered on the road to filing for bankruptcy, is to determine whether you will seek professional assistance in the pursuit of a bankruptcy case. Some people do elect to file for bankruptcy on their own without the aid and assistance of a lawyer. However, in most instances, it probably is in your best interest to seek the professional assistance of a lawyer in order to properly pursue a bankruptcy case. Therefore, unless you have a very simple bankruptcy on the horizon and unless you actually have some definite, practical legal experience, you should seek out the assistance of a lawyer to aid you in pursuing your case.

In working towards fully understanding how to file for bankruptcy, if you do make the decision to hire a lawyer, you will need to begin an organized search to find the best attorney to meet your needs. Keep in mind that in this day and age there are lawyers that specialize specifically in the area of consumer bankruptcies. As a result, you most likely will want to narrow your search to those specific attorneys who do have experience in dealing with bankruptcy cases. In the long run, you will be best served by engaging the services of a lawyer who has dedicated his or her career to bankruptcy law.

Once you narrow down the list of attorneys you are considering, the next phase in considering bankruptcy is to obtain references in regard to each of these attorneys’ prior performance. References will provide you with specific information on how a particular lawyer handles his or her business and on how successful he or she has been in the pursuit of prior bankruptcy cases. Your local bar association can provide you with the names of lawyers that specialize in the practice of bankruptcy law.

The final step in considering bankruptcy is to actually engage the services of an attorney. At this juncture, you attorney will prepare a bankruptcy petition on your behalf that will be filed in the bankruptcy court. With the filing, your creditors will have to suspend seeking debt collection from you during the period in which the bankruptcy case is pending.

By following the steps outlined in this article, you will be able to take serious action in order to get your financial house in order. Of course, bankruptcy really is an option of last resort when it comes to dealing with impossible debt. Therefore, you need to make sure you have exhausted any alternative options before you actually begin the course of pursuing a bankruptcy case.

Before you file bankruptcy, it is a good idea to look into other alternatives if at all possible. New bankruptcy laws make it more difficult to file than it used to be.

Why Has Filing For Bankruptcy Doubled?

From the period of 1994 to 2004, filing for bankruptcy has doubled. Bankruptcy filing has spun out of control with consumers being targeted with easy credit. This has become a major cause for bankruptcy cases.

New Bankruptcy Laws?

There is now a new law for bankruptcy that was passed called the “Bankruptcy Abuse Prevention and Consumer Protection Act”. People struggling to pay their credit debts are now going to have to deal with this new bankruptcy law.

Bankruptcy Can Stay On Your Credit Report For 10 Years

Filing for bankruptcy can be on your credit for up to a decade. It’s a good idea to look into alternatives for bankruptcy. Buying anything on credit can be a real challenge for many years after you file bankruptcy.

Alternatives To Filing Bankruptcy

Contacting creditors is an alternative to bankruptcy. Instead of filing for bankruptcy, you work out payment options with your creditors. In many cases they are very willing to work with you. It’s to their advantage to keep you as a customer. The creditors know the alternatives for bankruptcy will bring them more profits if you don’t file for bankruptcy.

Getting a debt consolidation loan is a good alternative for bankruptcy. Financial services can combine all your debts into one loan payment every month. A consolidation loan as an alternative for bankruptcy, can help pay off debts. For bankruptcy consolidation loans, you can shop online for the best terms and rates. Lenders are very competitive to earn your business online.

You may also consider a debt workout for bankruptcy alternatives. With a debt workout, an attorney contacts your creditors and makes arrangements. In most cases the monthly payments will be less than if the credit account was settled in full. For some cases they want the payment in full, but over a longer period of time than originally stated on the credit agreement.

Bankruptcy alternatives are a good idea to consider, before you rush off to file for bankruptcy. If you look into some of these alternatives, at least you will know you tried your best to avoid bankruptcy. Having bankruptcy on your credit report for 10 years can be a long time.

How To Find A Bankruptcy Lawyer?

If you have decided there is no alternative to filing bankrupty,you may be asking yourself, “how do I find a good bankruptcy lawyer? The best way to find a good bankruptcy lawyer is through referrals. Family members and friends who filed bankruptcy in the past can refer you to a good bankruptcy lawyer. The yellow pages in a phone book is another great place to find reputable bankruptcy lawyers. Another invaluable place to find a good bankruptcy lawyer and services in on the Internet. When you search for a lawyer, try to find a lawyer that deals with your type of bankruptcy. You can get free advice with the first meeting.

Is The Law Firms Bankruptcy Lawyer Experienced?

Find out if your type of bankruptcy case is right for the law firms lawyer. Has the bankruptcy lawyer handled similar cases in the past? Take time to look over the alternatives to bankruptcy with your lawyer. There may be a way out of bankruptcy. A good bankruptcy lawyer can give you free advice on what chapter bankruptcy you should file. Bankruptcy lawyers will have you fill out a bankruptcy evaluation to see what is right for your debt and financial situation. To save yourself from wasted time and frustration, discuss in detail, options available to you with your bankruptcy lawyer.

What Information Will I Need For A Bankruptcy Lawyer?

With your first visit, it’s important to bring everything you can on the first consultation. You will need a list of all the creditors and how much you owe for your bankruptcy lawyer to consider. This includes any insurance, medical bills, auto loans, taxes, student loans and any personal loans. Your bankruptcy lawyer can give you the advice you need with this important information. This will make the filing process easier if you do decide to file bankruptcy.

Bankruptcy is the last resort for any debtor wherein he/she legally declares the inability to pay back the debt owed. In most cases bankruptcy is initiated by the debtor or the organization. However creditors can also request bankruptcy in an effort to get back what they are owed. After filing bankruptcy you can choose the life you want to live – you can either re-build your finances or plummet deeper into the abyss.

Follow The Checklist below and You’re Going to Emerge Unscathed Even after Bankruptcy

• Restrict or if possible STOP using credit cards

• If required get a secured bankruptcy credit card an pay your dues regularly

• Wait for two years before availing mortgage or even bankruptcy car loan to get the best interest rates

• Get copies off your credit reports and ensure that your accounts are listed as discharged

Bankruptcy Loan – Getting a Loan after Bankruptcy

Availing small and easily repayable bankruptcy loan – be it bankruptcy home loan or even bankruptcy car loan, will help you not just deal with your financial obligations but it will also help you rebuild your credit rating. A small bankruptcy personal loan is the ideal solution to repair your credit status. However there are some facts about bankruptcy loans that you must be aware of.

Firstly, bankruptcy loans are recommended only for people who have declared themselves bankrupt and only after their case has been discharged, their creditors have been paid. You have to wait for at least 2 years for your bankruptcy home loan or bankruptcy car loan application to be approved without unnecessary delay. Generally lenders perceive bankrupts as threats and don’t particularly want to risk lending to a recently discharged bankrupt. If you have chosen Chapter 7 Bankruptcy you must wait for 2 years to apply for a loan and in case of Chapter 13 Bankruptcy you need to first pay the full amount to your creditors before applying for a loan.

Can You Get A Credit Card After Bankruptcy?

You owned a home and hardly ever defaulted on your monthly payments. Your credit report sparkled. But unfortunate health circumstances forced you out of your job and you had to file for bankruptcy…Today you are looking for bankruptcy credit card without being charged outrageous interest rates. So what are you’re choices? You can choose between secured credit card for bankruptcy and unsecured credit card after bankruptcy.

Secured bankruptcy credit card is secured by a savings account you establish with your creditor. This savings account works as collateral for your credit limit. If you default on your payment your creditor will take money from the savings account. If you’re looking for a risk free credit card after bankruptcy – unsecured bankruptcy credit card is the option for you as it does not require any collateral.

Many people think about filing bankruptcy but the fear of life after bankruptcy hold them back. The information offered in this article aims to enlighten you on what you can expect when you have filed for bankruptcy.

Becoming bankrupt is not something that many people think about. There are occasions when this will happen and these individuals will need to file for bankruptcy. The assorted chapters of bankruptcy like chapter 13, and chapter 11 are taken from the bankruptcy code. This code was established by the US congress.

Believe it or not, much of these laws are in place to protect the individuals who are having financial problems. Below we will outline what the bankruptcy codes are and what they mean to you.

These laws were put in place so that there was a uniform law about bankruptcy that could be found throughout the US. These laws from the bankruptcy code are designed to protect the person who is in debt from further problems.

There are currently four main types of bankruptcy laws that are taken from the bankruptcy code. You will recognize these bankruptcy laws as chapters. Chapter 11 is one of the bankruptcy laws that can be found in the bankruptcy code under the heading chapter 11.

The different chapters inside the bankruptcy code provide info for people who are in debt. The various ways that the law can work to keep you safe from unreasonable hassles can be found inside the pages of the bankruptcy code chapters.

As a citizen you have the right to view and read these laws. The only problem that we see is it is typically to late for most people. Meaning they are already in financial trouble, so reading about the laws to stop the bankruptcy may not work. However, you will still want to understand the rights you have being in a bankrupt state of affairs.

While the US government has provided the framework for these laws of the bankruptcy code each state has the right to pass other laws that will work in accordance with the bankruptcy code. They don’t have the right to change the law, just factors that pertain to their specific state can they add.

The states can only provide other laws that are compatible with their state’s laws. Otherwise the states themselves don’t have the power to govern how the bankruptcy code works.

There are many dissimilar and new laws that you can find when you look through the bankruptcy code. One of the new laws that you will find is the altered state of the debtor-creditor relationship.

While the different states can’t vary the basic rules of the bankruptcy code they do have the right to interpret how these bankruptcy claims are filed and acted on in their respective states.

If there is a major change to the bankruptcy code this change will be passed by congress. One such change that has taken effect alters the rules of bankruptcy for chapter 7. In this part of the bankruptcy code all debtors must prove that they have the right to file for bankruptcy.

The bankruptcy was established and put into place to address those that are in financial trouble and for creditors to get their money back. This of course if a very general definition, but will serve the point. So be responsible and spend less than you make.

They will be allowed to file for bankruptcy only if these people have fulfilled a counseling session. This step has been taken to hold that the bankruptcy code is not being misused by the assorted individuals who want to avoid paying their various debts. As the bankruptcy code has been placed for our shelter it is best if you handle these laws with respect.

Remember, bankruptcy is here to help and if you respect the laws of the code then it can be used as a tool if you are every in the need.

Now days, with the wide availability of bankruptcy form processing services on Internet, filing bankruptcy online has now become easier and the good part of the story is that the process is very easy and time saving. If you understand the legal requirements associated with filing bankruptcy and you know what are the forms that you need to fill and submit in this regard, you do not even require hiring a bankruptcy attorney to help you with the procedure of filing bankruptcy.

Ways To File Bankruptcy

In fact, there are plenty of ways you can use to file court petition for bankruptcy. For example, if you can hire bankruptcy lawyers to do the job for you or you can avail the various online bankruptcy services available on Internet, or if you are a legal expert and you know the ins and outs of the various bankruptcy laws, you may choose to go for personal filing.

How Much Does Filing Bankruptcy Online Cost?

Depending upon the type of filing process you have chosen, the costs will vary. For example, filing bankruptcy online for chapter 7 bankruptcy and chapter 13 may cost you somewhere around two hundred dollars or less, depending upon the type of bankruptcy you are filing for. If your bankruptcy case is a bit complicated and you know that you are not capable enough to defend your bankruptcy claims yourself successfully, it is always recommended to avail the valuable services of an expert bankruptcy attorney. They will never let you down. These days, even the bankruptcy lawyers choose to go for filing bankruptcy online, as it makes the process much easier and most importantly, it saves a lot of time both for the debtor and the bankruptcy attorney, but of course, it costs a little more.

Advantages Of Filing Bankruptcy Online

If you do not want to hire a bankruptcy attorney, it will be wiser for you to take advantage of the various online bankruptcy services. They are known as online bankruptcy form processors. They will help you in several ways. For example, when you submit your specific bankruptcy case to them along with all the relevant information, they will suggest you the right type of bankruptcy that you should claim for and they will provide you the right bankruptcy forms to fill. Once you submit those forms, they will review all the information you provided with the forms. If some information is missing, the online bankruptcy forms processor will inform you regarding the same and will ask you to submit the missing information.

Once they approve everything, on your request, they will even file a court petition for bankruptcy for you. This way, we can see that filing bankruptcy online will take away the pain out of the complicated proceedings.

Bankruptcy is a phrase heard and used by many. Individuals tend to have pre-conceived notions about bankrupts that they are individuals who are totally broke. But bankruptcy information can be a real eye opener for debtors who are contemplating bankruptcy and individuals who are seeking information about bankruptcy. It helps debunk all the myths attached to bankruptcy.

1)What is bankruptcy?

Bankruptcy is a legal term to formally identify an individual as bankrupt. It refers to the inability of any debtor or organization to pay their creditors. In majority of the cases, bankruptcy is initiated by debtors or organization themselves. The main purpose of bankruptcy law is to provide any honest debtor a chance to start afresh and to help a debtor repay his/her creditor/s in an orderly manner to the best extent possible by the debtor. Debtors are discharged of most of their financial obligations after their non-exempt assets have been distributed. Creditors can no longer harass debtors or continue any lawsuits once the debtor has opted for bankruptcy.

2)Implications of bankruptcy:

Filing bankruptcy is one of the hardest financial decisions. Debtors must carefully examine the implications of bankruptcy and choose it as a last resort to deal with financial troubles. Following are the implications of bankruptcy:

Lose control over your assets (except items/equipment required for work/household purposes)Cannot act as director of a company/practice as a lawyer/chartered accountantNegative publicity as a bankruptcy is advertised in ‘London Gazette’ and a local newspaperBankruptcy remains on record with credit agencies, land registry and other organizations

3)Common terms to understand bankruptcy

Bankruptcy petition: Individuals who opt for bankruptcy need to formally request protection of the federal bankruptcy laws. It involves filling of two important forms-The petition (Insolvency Rules 1986 form 6.27) and the statement of affairs (Insolvency Rules 1986 form 6.28).Chapter 7 bankruptcy: This chapter of the bankruptcy code provides for ‘liquidation’. The debtor’s non-exempt property will be sold and the proceeds will be distributed among his/her creditors. Chapter 13 bankruptcy: This chapter of bankruptcy provides a reorganization plan for individuals with regular income. It allows a debtor to retain his/her property and pay back his/her debt within 3-5 years.

Debtors could also consider various alternatives to bankruptcy before filing for bankruptcy. IVA, debt consolidation loan, debt management etc are proven alternatives to bankruptcy which the debtor can consider before he/she files for bankruptcy.

You’ve got some serious debt problems. Take heart in the fact that a lot of people do these days. The key to getting out from under debt is to evaluate the situation you’re in, and then to decide if you’re willing to do what it takes to change it. Are you going to stop using the mall as your playground? If so then you have a chance to get out of debt without resorting to bankruptcy.

In fact there are many tactics to try before you even think of heading to a bankruptcy lawyer. Here are some important considerations and alternatives to help you avoid bankruptcy. New bankruptcy laws make it more difficult to file than it used to be.

From the period of 1994 to 2004, filing for bankruptcy has doubled. Bankruptcy filing has spun out of control with consumers being targeted with easy credit. This has become a major cause for bankruptcy.

What About The New Bankruptcy Laws?

There is now a new law for bankruptcy that was passed called the “Bankruptcy Abuse Prevention and Consumer Protection Act”. People struggling to pay their credit debts are now going to have to deal with this new bankruptcy law.

3 Effective Alternatives To Help Avoid Filing Bankruptcy

1. Contacting creditors is an alternative to bankruptcy. Instead of filing for bankruptcy, you work out payment options with your creditors. In many cases they are very willing to work with you. It’s to their advantage to keep you as a customer. The creditors know the alternatives for bankruptcy will bring them more profits if you don’t file for bankruptcy.

2. Getting a debt consolidation loan is a good alternative for bankruptcy. Financial services can combine all your debts into one loan payment every month. A consolidation loan as an alternative for bankruptcy, can help pay off debts. For bankruptcy consolidation loans, you can shop online for the best terms and rates. Lenders are very competitive to earn your business online.

3. You may also consider a debt workout for bankruptcy alternatives. With a debt workout, an attorney contacts your creditors and makes arrangements. In most cases the monthly payments will be less than if the credit account was settled in full. For some cases they want the payment in full, but over a longer period of time than originally stated on the credit agreement.

Filing Bankruptcy And How To Find A Good Lawyer

If you have decided there is no alternative to filing bankrupty,you may be asking yourself, “how do I find a good bankruptcy lawyer? The best way to find a good bankruptcy lawyer is through referrals. Family members and friends who filed bankruptcy in the past can refer you to a good bankruptcy lawyer. The yellow pages in a phone book is another great place to find reputable bankruptcy lawyers. Another invaluable place to find a good bankruptcy lawyer and services in on the Internet. When you search for a lawyer, try to find a lawyer that deals with your type of bankruptcy. You can get free advice with the first meeting.

What Will I Need For My Bankruptcy Lawyer?

With your first visit, it’s important to bring everything you can on the first consultation. You will need a list of all the creditors and how much you owe for your bankruptcy lawyer to consider. This includes any insurance, medical bills, auto loans, taxes, student loans and any personal loans. Your bankruptcy lawyer can give you the advice you need with this important information. This will make the filing process easier if you do decide to file bankruptcy.

If you’re not going to be able to change your behavior enough to get your debts under control, then you may, at some time, have to resort to bankruptcy.

In the United States, federal bankruptcy was designed by congress as a relief measure to persons or organizations who are financially distressed. In other words, in the face of insolvency, an individual or organization can find relief against their debt obligations in federal bankruptcy.

Chapter 7 of the federal bankruptcy code provides for the appointment of a trustee for the liquidation of assets of the debtor for orderly distribution to the creditors. When a debtor’s assets are being liquidated, federal bankruptcy code requires that this should be subject to certain exemptions.

Federal bankruptcy exemptions determine how much property a debtor can keep when they file for Chapter 7 bankruptcy and also the category of items. One of the schedules in a debtor’s petition under the federal bankruptcy code is the schedule of exempt property. In essence, Federal bankruptcy law provides that creditors cannot claim certain properties of a debtor.

In the same manner, the debtor cannot be discharged of some debts. In some states, state exemptions are different from federal exemptions (in the United States). Although each state is permitted by law to adopt its own exemption law, certain states allow Federal bankruptcy exemptions and so a debtor may choose to abide by the federal list of exemptions or by that of their home state. But overall, the state decides which exemption is upheld in a bankruptcy court within that jurisdiction. This underscores congress goal to offer protection to financially distressed individuals or organizations. Married couples may double all exemptions under federal bankruptcy code.

Bankruptcy is something that could happen to anyone. Even big organizations do lose their shirts. Since bankruptcy is something that could actually happen to anybody, our laws provide safety nets for people, municipalities and business entities that have financial difficulties. Chapter 12 Bankruptcy deals with family farmer or fisher folks, Chapter 11 Bankruptcy deals with business reorganization, Chapter 9 talks about municipalities while Chapter 15 focus on ancillary and cross-border cases. Although there are many types of bankruptcy, only two of these types of bankruptcies actually concerns individuals like you. Chapter 7 and Chapter 13 Bankruptcy tell you how you van dissolve you piles of debts.

According to a study in 2007, on the rate of federal bankruptcy and state bankruptcy, businesses are embracing proceedings under state laws rather than federal bankruptcy laws because proceedings under the former is faster, less expensive and more private.

In view of this, the debtor should endeavor to compare Federal bankruptcy exemptions with their states exemptions using the guidance of a solicitor when filling their bankruptcy forms.

Filing Fees For Bankruptcy

Filing for bankruptcy entails some expenses. Just because you are broke that does not mean that you are exempt from court filing fees. However, the good news is that filing fees for individuals are very much lower compared to those filing fees imposed on businesses. For instance, where businesses filing under Chapter 11 Bankruptcy are required to filing fee in the amount of $ 1,039, individuals who are filing bankruptcy under Chapter are only required to pay $299 while those who are filing under Chapter 13 gets to pay $274. Family farmers and fisher folks also get to pay lower fees compared to big companies. Under Chapter 12 Bankruptcy these people are only required to pay $239. Sounds complicated? Not really. If you have experts to guide you through bankruptcy filing and the proceedings that will follow thereafter, you will get through the whole thing without a snag.

No matter the route you choose, guidance and information is very essential. Bear in mind that bankruptcy is not a panacea to financial indiscretion but an opportunity to start afresh and making use of the lessons learnt pre-bankruptcy.

Only a few short years ago, it used to be fairly easy to file bankruptcy, almost as easy as it is in the board game of Monopoly, where the ramifications of doing so were about the same as in Monopoly. But it was determined that so many people were taking advantage of bankruptcy to compensate for a lack of financial skills, a lack of money management, and basically attempting to lead a champagne lifestyle on a beer budget that the bankruptcy laws were recently changed.

To be sure, the bankruptcy laws still vary from state to state, but there are some things that even state legislature cannot disagree on if they conflict with the federal bankruptcy laws. Even at this, some people have attempted to file bankruptcy in a state that may have more lenient bankruptcy laws than the state in which they have listed as their address of residence, and one of the things that the new bankruptcy laws is doing is ensuring that people who file bankruptcy do so in the state in which they live.

Another requirement of bankruptcy with the new laws is that the person filing bankruptcy is required to attend credit counseling sessions and financial education courses. While this is still part of the law and you can expect that requirement into the foreseeable future, studies are starting to show that such a requirement has so far failed to deliver the positive results that were expected, and in fact have delivered very few significantly measurable benefits to the consumer.

Is there a value to requiring consumers to spend (or as some say, “waste”) their time on credit counseling and financial education courses before being allowed to file bankruptcy? Many are saying it makes no sense at all. On one hand, the advocates who say it makes little sense are right, since by the time a person is so far in financial distress that bankruptcy is their most viable option, the time for financial education and credit counseling has long since passed. But on the other hand, how do you require someone to attend those classes and counseling sessions BEFORE they get into a bankruptcy situation, since the vast majority of people are unwilling to admit, even to themselves, that they are heading in the wrong financial direction.

Good consumer information about bankruptcy is one answer. While the government or the state cannot protect each and every consumer from financial folly, nor can they force the consumer to attend courses or counseling, they can put the monkey on the consumer’s back by making information about bankruptcy available, perhaps even at no charge. The vast majority of consumers have no clue about the various chapters of bankruptcy and which one they should choose if they get into a bankruptcy situation.

Moreover, most consumers think of bankruptcy as their only option, when in reality the act of declaring bankruptcy should be the option of last resort. There are many viable alternatives to bankruptcy, most of which do not have the long-lasting negative impact on the consumer, such as the fact that bankruptcy stays on one’s credit report for the next 7 to 10 years. Consumers should be taught about the options that are available before considering the “act of last resort”, which is bankruptcy. For example, debt consolidation firms can pull a consumer out of the financial fire without requiring bankruptcy in many situations.

Consumer education about bankruptcy is paramount, and every consumer should make a point to understand at least the basics of bankruptcy, what it means, how it works, and most of all, what viable alternatives to bankruptcy are available.