Take care when considering bankruptcy for debt problems

Many people may find themselves contemplating bankruptcy when looking for debt help.

In a recent story for NY1 News, reporter Asa Aarons responded to a question put forward from a viewer about bankruptcy. The viewer was wondering if, given the nation’s financial difficulties, declaring bankruptcy makes sense.

Aarons noted that some bankruptcies can stay on a person’s credit history for 10 years. Those would include Chapter 7, 11 and 12 bankruptcies. Chapter 13 bankruptcies can stay with a consumer for seven years.

"I know things are tough, but bankruptcy is a big step that can hurt you for years, so make that decision carefully," Aarons said.

Bankruptcy rules dictate that people need to seek credit counseling before taking on bankruptcy.

Along with advising about bankruptcy, credit counseling can help consumers through setting up a debt management plan, which can help them with managing money. Through a debt management plan, people use the credit counseling service in order to pay off their lenders. Credit counseling can also help consumers through debt consolidation.

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