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According toDebt.org, factoring inmortgages, the average debt in the U.S. is $101,915 per household.
When debt gets out of control, its common knowledge that bankruptcy is an option.
However, it might not be as great of an option as it may seem.
Here are three reasons why you shouldntdeclare bankruptcy unless you have to.
Americans who find themselves in massive amounts of debt can turn to bankruptcy for relief.
Bankruptcy stops creditors from collecting and eliminates or restructures the debt to give the debtor a fresh start.
As Cruze acknowledged, It sounds easy just to wipe it clean and start over.
However, the issue doesnt just disappear.
Declaring bankruptcy means it will be on your credit report for years.
Your poor credit report may also limit your housing and employment opportunities.
The Root of the Problem Doesnt Change
Cruze referred to bankruptcy as an easy button.
However, this statistic doesnt account for individuals who have returned to debt after bankruptcy without filing again.
Cruze explained to the caller that its all about behavior.
This method allows you to eliminate your balances one by one, increasing your motivation as you build momentum.
Pay off the debt with the highest interest rate first and work toward the lowest.
A debt consolidation loan can simplify your situation as you have only one monthly payment to worry about.
Negotiate
Some debtors may be unaware that they can negotiate with their creditors.
Propose a solution in the form of a payment plan, a reduced interest rate or a lump-sum settlement.
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