Oct 22, 2012
By Dale Goldhawk
TOPIC – Bankruptcy & Insolvency
INFO – Bankruptcy and insolvency are the kinds of slippery debt slopes that Laurie Campbell sees all the time in her role of helping people find their way out of debt. It starts with the mismanagement of funds and living beyond your means — the two culprits that lead to insolvency, she says. Stick with your budget and don’t get sidetracked by extravagant expenses.
Through Bankruptcy, you become insolvent and are forgiven all your debts (with a few special exceptions). But bankruptcy comes at a big price, which is one reason why it is often referred to as the solution of last resort. Some of what you own may be taken away, your credit rating is affected negatively, and approval for unsecured credit can be very difficult.
A Debt Management Program offers you a big benefit. It helps you avoid getting a bad reputation that will make it harder for you to use credit in the future. That’s because a Debt Management Program allows you to avoid declaring bankruptcy.
Your creditors will appreciate it when you make the effort to pay them back through a debt management program.