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Is bankruptcy or debt relief in New Jersey better?

Consumer debt has reached its highest rate ever recently. Many consumers are finding their overall debt to be overwhelming. It's important that they avoid being taken in by ads that promise a quick and easy fix for the problem. According to the Federal Trade Commission, it is crucial that debtors be careful when responding to such ads.

Bankruptcy is an option that is generally considered be a last resort because it will affect a consumer's credit for up to 10 years. Prior to choosing bankruptcy, consumers could try considering several debt relief options that might work well for them in some cases.

One option is to tap into a home equity line of credit or take out a second mortgage. This option should be considered very carefully before proceeding with it. Another option is to contact creditors directly and try to work out a payment plan. The third option is to try contacting a credit counseling service and having them negotiate with creditors and handle the repayment plan.

In many cases, however, none of these options will work for a debtor for one reason or another. Then, personal bankruptcy could be a viable option. Whether a consumer is considering Chapter 7 or Chapter 13, a personal bankruptcy attorney could help the client to choose between the two, so that their choice is appropriate for their individual financial situation.

Based upon 2005 changes to the bankruptcy laws by Congress, there are more incentives to filing Chapter 13 than Chapter 7. Those incentives include the ability to retain property like a car or a home with a mortgage on it. An attorney can analyze a debtor's financial resources, assets and liabilities and help them to determine if they should file bankruptcy to help alleviate their debt problems.

Source: FTC, "Debt relief or bankruptcy? ", December 01, 2014

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