Credit cards, personal loans and other forms of debt can be a great tool for Colorado residents to use to purchase certain items they would otherwise be unable to buy. However, if these bills and loans are not paid off, debt can add up quickly, with each month stacking on top of the last and interest payments overtaking the principal balance.
Individuals who are deep in debt need to take some time and seriously consider what their options are for debt relief. In certain situations, credit card companies and the like are willing to negotiate with individuals for different repayment terms than are currently in effect, which can cut the person a break and enable them to pay off their bills.
Other individuals might try consolidation or taking out a second mortgage, which might provide the leniency they need to take control of their finances. Each of these strategies has drawbacks, however, which can make the situation worse if left unchecked.
In these serious times, one option individuals should consider is Chapter 7 bankruptcy. In particular, individuals who are unable to pay their debt should strongly consider filing for Chapter 7, because these individuals may never be able to pay off their debt with their current income level.
Though bankruptcy should never be taken lightly, Chapter 7 can be a highly effective way for individuals to rid themselves of debt. Individuals with particular kinds of debt, like credit card bills or medical debt, may be well suited for bankruptcy, as are those who do not own a great deal of property. Ultimately, individuals should meet with a qualified bankruptcy attorney to determine whether bankruptcy is right for them, given their personal situation and needs.
Source: Daily Finance, "How to know when bankruptcy is your best option," Katherine Muniz, Jan. 26, 2014