Bankruptcy - Is It A Good Option
By Joe L.Golson, Fri Dec 9th

Today more people than ever are turning to personal "bankruptcy"as a way of solving their financial problems. Estimates indicatethat 2005 will see nearly 1 in 60 Americans filing forbankruptcy. People owing as little as $6,000 are unknowinglyfiling, not knowing of alternative methods of eliminating theirdebt.

The reason people take this hasty action with such a low debtamount is the harassment and overwhelming pressure fromimpatient collectors trying to recover their money. In the caseof Consumer Credit Counseling agencies, once they find that theyare unable or unwilling to help, they will suggest "bankruptcy"as the answer - unconcerned of the effect it will have on yourfuture.

In bankruptcy, a court order forces all commercial creditors tocease and desist from attempting to collect the debts you owethem. Depending on the declared (Chapter 7 or 13), itstops wage garnishment, reverses judgments, and generally wipesout debt.

For some people, is the only sensible option. If youhave $60,000 in debts, and you'll never earn more than $1,200per month, then you're broke! The sooner you eliminate the debt,the sooner you'll have a fresh start. With more than 1.4 millionbankruptcy filings in 2000, Congress is passing legislation thatwill make it tougher to declare bankruptcy.

In "bankruptcy", certain personal property is treated as exempt.The banks and creditors cannot touch that property in attemptingto recover the money owed to them. Your home, car and otherpersonal effects like clothing, and other assets are consideredexempt, but this varies from state to state. Any property thatis not exempt is liquidated and distributed to the creditorsunder the supervision of the court. Since most people enteringbankruptcy have only exempt property anyway, there's usuallynothing left to distribute, so the creditors typically getnothing.

Seems like a good deal? Many people mistakenly see asa good, low cost way to rid themselves of debt. There are othercosts associated with that make it a very badsolution for most people. The cost of filing itselfis minimal. Depending on what state you live in, you can expectto pay anywhere from $400 on up to $1,600 for the whole process.That's just the beginning. The will stay on yourcredit report for 10 years - and on your court records for 20years. The seemingly "low cost" method will cost you dearly asit will follow you for the rest of your life. If you ever applyfor a loan, job, apartment or insurance, one of the firstquestions normally asked is "Have you ever filed forbankruptcy?" And, for the rest of your life, you'll have toanswer "Yes."

You might be able to eliminate your debt, but the effectsemotionally and the effect on your personal life will last formany years to come. Consider applying for a terrific job afteryou have filed bankruptcy. These days, employers will run acredit report to determine how you faired financially. This willeffect whether the employer will give you that dream job or not.Even if you do get the job and your employer later runs a creditreport on you, you will still have to explain the bankruptcy.While employers can't fire you because of a bad credit report,they can certainly limit your future promotions.

Future purchases are affected as well; after several years, youmay opt to purchase a home. If you're in sufficient shape atthat point to qualify for a mortgage, you'll pay a higherinterest rate than the average consumer who has never filed forbankruptcy. Assume you want to purchase a $100,000 house a fewyears after filing bankruptcy. You make a $10,000 down payment.This will result in applying for an $80,000 mortgage. While your"good credit" neighbor would obtain an interest rate of 4.5%,you would get a rate of 7%. While it seems that the extra 2.5%difference is not bad for having filed in the past,it's what you will pay monthly where you will feel the pinch.That extra 2.5% on a mortgage will increase your monthly paymentby $200 per month with the total of your payments reaching morethan $70,000 over the 30-year life of the mortgage.

Besides being a devastating blow to your credit, a bankruptcycan also be a very stressful and embarrassing decision tocontinually have to explain to every potential lender. If youhave no choice, then you should proceed, understanding theconsequences. However, the majority of people who take thismethod of debt elimination don't know what they're gettingthemselves into or the consequences thereafter. They aredesperate,

California Mortgage Refinancing - California Refinance Rates
Avail the benefits of California mortgage refinancing. Also find how to secure best California home mortgage refinance rates which helps you find the best mortgage solution for your home financing needs to fit every situation.
California Home Mortgage Loan Refinance : California Home Loan Refinance
Lowest rates available on California home loan mortgage refinance and refinance your mortgage while rates are low. Get California Home Interest Loan Refinance quotes online.
California Adjustable Rate Mortgage Loans: ARM Loans CA
In California adjustable rate mortgage loan (ARM) programs, the risk of fluctuating interest rates is shared equally between the borrower and the lender.
California Bad Credit Mortgage Loans
Bad credit OK! Find California mortgage loans to purchase your home, consolidate your debts-even save you from the edges of bankruptcy-and get yourself on the path to financial freedom.
California FHA Loans : California FHA Home Loans
California FHA home loan is the best way to finance your home. Find how to secure best terms on California FHA home loans with a reliable lender.


and they get talked into filing by thecollectors or attorney without understanding the impact on theirfinancial future.

Keep in mind that personal bankruptcies are usually unnecessaryas there are better options available. Many people are forced,against their wishes, to file to protect themselvesfrom aggressive creditor tactics or attorney. Ultimately,bankruptcy still means failure to employers and creditors.

Complete Information and servicesprovides access to free filing information andresources.

About the author:Joe L.Golson, writer and Affiliate Marketeer for work at homehome business opportunity. Forother work at home,work from home business ideas,trafficresources and information visit;Affiliate Marketing And TrafficSolutions