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Considering Bankruptcy? BALANCE Your Options First
Copyright © 2004 BALANCE
Bankruptcy. The very word evokes strong feelings in most people. Though rarely anyone's first choice when trying to cope with overwhelming debt, the decision to file should be made only when fully aware of all its consequences.
Here are some facts to consider about chapter 7 bankruptcy:
- Filing bankruptcy can be expensive: Court costs and attorney's fees add up, and are non-dischargeable. Depending on your situation, this is money that potentially could be spent bringing past-due accounts current, or making payment arrangements.
- You may lose property: If your assets are worth more than state and federal exemption guidelines, they will be liquidated and the proceeds divided up among your creditors. This can include your home, car, heirlooms, and jewelry.
- It doesn't solve spending problems: Bankruptcy won't be much use if you spend more than you make. Because credit is available even after discharge (usually with astronomical interest rates), many people quickly descend into debt again. Sadly, almost 50 percent of all people who file do so again as soon as the laws allows (six years).
- It may jeopardize your relationship with your credit union: If the credit union takes a loss on an account, we may not extend the benefits of membership to you in the future.
- Not everything can be discharged: You can only walk away from such unsecured debts as credit cards and signature loans. So if a good portion of what you owe consists of student loans, tax debt, legal fees, or back child support, bankruptcy won't help.
- Bankruptcy will stay on your credit report for ten years: That's a daunting time frame for most people. The damage to your credit report can prevent you from renting an apartment, buying a home or car, or even acquiring life insurance. And many employers are now pulling credit reports to determine a candidate's responsibility and stability, so even your future job may be at stake.
If you are struggling with financial burdens, Arizona Federal can help. We've teamed with BALANCE Financial Fitness Program, a company that specializes in debt management and bankruptcy prevention. As a benefit of membership, you have access to financial professionals who can review your situation in depth, make practical suggestions, and discuss all your options. For free.
Call them toll-free at (888) 456-2227, or visit www.balancepro.net for more information.
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