Pay Off Debts Forever or Get a Bankruptcy Discharge?

Getting into debt means that you have to find a way out of it. There will come a point where the decision has to be made whether to keep servicing the balances or file bankruptcy. Working to pay off debts may sound better than bankruptcy, but it has its own problems, ones that need to be looked at closely.

How Banks Keep You Paying

If you're to the point where you're only paying the minimum balance on your cards, you're going to be paying on that debt for years to come. The banks are required to disclose how long it will take to pay off a balance when paying only the minimum. Take a good look at that number. Do you really want to be throwing away your money for that long? Most people will probably say no. The only way to get the debt down sooner is to stop using the card and pay more than the minimum balance. It's hard not to use them because credit cards are handy to have in an emergency such as paying a utility bill.

Banks charge high interest rates, and many users saw their rates increase sharply after the credit card act was passed. What was once manageable debt turned into a ballooning balance that now takes longer to pay. Random fees and late charges create the perfect storm of debt out that's gone out of control. Because credit is so important to people's lives, they bite the bullet and keep paying.

Opting to Get a Bankruptcy Discharge

It's time to consider bankruptcy when your debts are overwhelming your ability to pay them. If it's to the point that it will take years of your life to pay off debts, ask if you really want to take that step. Chances are good that your credit has already taken a hit because of high balances and minimum or missed payments. Bankruptcy really won't hurt the rating that much more, and give you the opportunity to rebuild after discharge.

There's nothing quite like the relief of a discharge, knowing that there will be no more hounding by creditors. Not having to service your debt anymore means that money can be put aside for future emergencies. You'll learn how to rely on yourself to get out of financial troubles. No more leaning on your credit cards and not knowing if you'll ever pay off the balance.

Legal Consultation

It's never a bad idea to let an expert look over your financial situation and giving you an honest assessment. The best person for the job is a bankruptcy attorney, especially one who's filed many cases like yours and can give you the reassurance you need. If you decide not to pay off debts and file, it can be a scary step. But one that's made less so by having a lawyer at your side.