Are you on the verge of credit card bankruptcy? Maybe all your cards are maxed out and you can't afford to pay them back.
Whatever the case may be, you should always make bankruptcy your last option for debt relief.
There are much better options than filing bankruptcy and new federal debt relief laws makes one of them, debt settlement, particularly attractive.
For consumers that are buried in credit card bills and are struggling to make their monthly payment there are really only 2 options.
Credit card bankruptcy and debt settlement.
Unless you are experiencing an extreme financial hardship and have no asset value then you probablywon't qualify for Ch.
7 bankruptcy.
Ch.
7 is the "clean slate" bankruptcy where almost all of your debt is eliminated.
This used to be very popular in the past but new laws passed in 2005 make it very difficult to qualify for Ch.
7.
You are much more likely to qualify for Ch.
13 bankruptcy.
This is where your debt is reorganized and you get a repayment plan to pay back the majority of the debts while a certain percentage is eliminated.
Ch.
13 is similar to debt settlement with one major difference.
Bankruptcy will effect your credit for at least 7 years while typically consumers can recover their credit score from a settlement within 3 years.
If you are over $10,000 in unsecured debt it would be wise to look into a debt settlement program.
On October 27th 2010 new laws were passed by the FTC which make this a much better option.
This new legislation bans debt relief programs from collecting upfront fees.
Now consumers that enter into a debt settlement program will not have to pay a dime until their debts actually settle.
If they don't perform you don't pay a dime.