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You know it. Something bad happened and in this economy, bankruptcies are at a record high. Over 1.5 million were filed in 2010 alone. But you know there are several reasons NOT to actually go through with it? It’s true. Here are seven very important reasons why you should not file bankruptcy:

1. Bad Credit: A bankruptcy will absolutely negatively effect your credit. A Chapter 7 or Chapter 13 bankruptcy can actually put a big black mark on your record for as long as 10 years, and your credit score drops 150 to 250 points. This could spell trouble in many avenues, including job hunting.

2. You CAN lose your property: A lot of people don’t know that if a creditor doesn’t get enough of a payout they can sue and depending on your state’s laws and your own personal situation, you can lose your car and your home if you have one.

3. Problems with Employment: Bankruptcy can do a lot more than make it difficult to rent or own a home or car because many employers now are requiring credit checks as part of their screening process.

4. It goes on your public record. A bankruptcy stays on your public record for 20 years, not something to be taken lightly.

5. You may still owe money: Declaring bankruptcy does not eliminate all debts. There are certain debts that cannot be discharged even after you say you’re bankrupt. This includes student loans, child support, alimony, back taxes, and certain judgments can’t be discharged.

There are alternatives to filing bankruptcy. The first recommended step is to find a credit card debt settlement program for a free consultation.

Evelyn Novelo is a guest author for Franklin Debt Relief, a leading credit card debt consolidation company in Chicago, Illinois.

Why Bankruptcy is Better Then Foreclosure?

When you get behind on your mortgage payments you need to decide to go with option for foreclosure or bankruptcy but both option are neither attractive nor good for your credit score. When you have no other option to survive you have to choose the less bad one between these two options. There must one be better upon another that is depending on homeowners situations.


The person only who not like to hold his property the foreclosure may be little attractive to him but others must prefer to filling bankruptcy then foreclosure. Although both will make negatively affect on your credit for up to 10 yrs you may not able to buy property or real assets for next 10 yrs. But a well furnished filling of bankruptcy will make less affect then the foreclosure so you can quickly recover your credit position by getting a job or new opportunity of earnings and at fast make purchase with cash to rebuild credit score.

Once you able to recover your credit score you can get back you old good life. If you prefer to foreclosure your home property, you will even not able to eligible for employment as because of you credit report will reflect all about your character what you are and your ability to pay back their obligations. The bankruptcy process will eliminate all your dues or settle your credit and you get a fresh start to life, but when you filling a foreclosure you may not able to clear off all your debts so problems may still remain on your life and you are also locked for taking new loan for next 7 years.

After all it is clear that you must choose the best one according to your situation but although a foreclosure remains on your credit score for 7 years and bankruptcy stands for 10 years other then that bankruptcy is better and quick recovering to fresh life.

Do you know the Bankruptcy Chapter 7 Rules?

The most common form of bankruptcy is known as bankruptcy chapter 7 in the united state. There is some description of process of liquidation under the lows of bankruptcy of the united state. This type of bankruptcy may be filled by an individual who have no dismissed cases for bankruptcy within 180 days and a business may also file Chapter 7 bankruptcy if the business is unable to pay off its creditors and bad condition debt collection. Generally bankruptcy is happen only when the debtor has no property to sale to repay his debt and he passes the entire chapter 7 qualifying process of bankruptcy.

The Chapter 7 bankruptcy is a process of several criteria. According to the new amendments the debtor has to pass now the means test which is a two steps process of calculation of debtor’s income. The first step of means test is the comparison between debtor monthly income and median income of the state. If the monthly income is less then median income of the state, the debtor can qualify for bankruptcy filling and if his monthly income is higher then median income, he must has to go for the second step of the qualifying process which is the calculation of debtor’s last 6 months disposable income . If the debtor’s 6 months disposable income is less then $ 6,000, he passes the means test and he can file a petition for bankruptcy.

The Chapter 7 bankruptcy is now very famous as liquidation bankruptcy. But before filling it a debtor must has to consult with any bankruptcy attorney who can help to qualify bankruptcy according to the state law.