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You may choose to file for personal bankruptcy when you are unable to keep yourself away from debt problems. And, it may work out for you when your outstanding debts climb up faster than you can pay them off. But this process has an adverse effect on your credit profile when it gets listed on your credit report. Therefore, it is better to consider it as the [b:6a30c4943e]last solution to any of your debt problems[/b:6a30c4943e].

Before you file for bankruptcy, you need to be know whether it can erase all your debts or if you can keep your home and car when you file for such petitions. Try to evaluate how much you owe, what are the payments, what part of your income can be utilized for the payments and whether you can actually cover up the debt payments with your income and savings.

You also need to assess the consequences of filing for bankruptcy - whether it can affect your promotions, new job applications, renting a new apartment, insurance or your ability to make some major purchases. You may also want to consider your financial goals within the next 10 to 20 years.

One way to evaluate whether you are a candidate of bankruptcy is to attend credit counseling sessions organized by the Consumer Credit Counseling Service. It is a nationwide non-profit association that offers professional advices based on your financial status, future goals and your ability to pay. The credit counselors work with you and your creditors to develop a repayment plan suited to your finances.

Think about the various alternatives that can help you to stay out of bankruptcy and resolve your credit problems. But the best way to get out of debts is to practice good money management skills. Avoid spending on unnecessary items or using a credit card unless you have the required cash to pay down the debts. Make sure that you are well protected with insurance, be it for medical purposes or your homeowners insurance. Avoid making high investments and do not involve yourself in joint debts with those who lack proper financial habits.

Finally, keep aside your idea of filing for a bankruptcy and look out for a better solution to your debt related problems.

Related Article[list:6a30c4943e][*:6a30c4943e]After Bankruptcy - Where you are?[/list:u:6a30c4943e]

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