Debt Assistance Guru

photo credit: fakelvis

When you’re struggling under the weight of excess debt, it is perfectly normal to consider your options. For those who are have fallen behind with their payments and are under pressure from creditors chasing them in writing and on the phone, or even in person, many people will weigh up the alternatives of debt counseling versus bankruptcy.

For many people, bankruptcy may seem like the easiest – or possibly the only – way out of their predicament. But if this is the case there are a number of things that you need to be aware of.

Firstly, while bankruptcy may seem like an opportunity for a fresh start, with none of your creditors able to touch you for unpaid sums, there are also a number of downsides.

For one, obtaining any kind of credit for many years afterwards will be almost impossible. This means no credit cards, no loans, no hire purchase and of course no mortgage. Bankruptcy means the uncertainty and indignity of not only not owning your own home, but not even being able to get one even if you want. You’re forced into the uncertainty of renting or of relying on friends and family.

Secondly of course, even if only you declare bankruptcy, this will also impact anyone else you live with. Their own credit scores will often be marked down because you reside at the same address. So you also need to take into account the needs of your friends and family.

Finally, bankruptcy can be a long, painful, depressing process with, depending on where you live, notices in the local newspaper naming and shaming you as bankrupt, as well as having to inform all the various creditors of this.

Because bankruptcy is likely to eliminate all existing debts, lawyers are normally loathe to grant such things and you may really have to fight. You may have to give up your belongings to illustrate you literally have no money to pay your debts.

My point is this… whilst bankruptcy may *seem* like an easy way out, and an opportunity for a fresh start, this really should be the worst case scenario. Nobody should voluntarily choose to become bankrupt simply because of what it can do for your self worth and your future life.

Debt counseling on the other hand has a lot to recommend it. Life exists after debt counseling. Sure, it can be a little painful at first, but it is perfectly possible to rebuild your life afterwards. All those debts, when they get paid off, help to set you free. To repair your credit and show creditors that you’re someone who they can trust. Someone who faces up to their problems and makes everything right.

In short, you’re an adult.

I also think that debt counseling is also good for your soul. You take a problem, work out a solution and make it happen. It helps you to feel in control, which is a feeling most people lose when they’re in serious debt. It’s an empowering feeling that really can make you feel better about yourself and life in general.

So when it comes to the question of debt counseling versus bankruptcy I would *always* recommend you at least *try* some debt counseling before writing it off because it simply has so many benefits while bankruptcy really only has downsides, no matter how you may try to dress them up in your head.