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How to know when bankruptcy is a good option

Filing for bankruptcy in Louisiana can have a significant impact on one's credit score. It can also affect a person's ability to get a loan in the future. Bankruptcies will stay on a credit report for up to 10 years, but lenders can ask borrowers to disclose a bankruptcy regardless of when it happened. There are alternatives to bankruptcy for those who are struggling to repay their debts.

For example, it may be possible to negotiate a debt settlement after missing one or more payments. Creditors generally prefer to get some of their money as opposed to potentially getting nothing in a bankruptcy case. Prior to filing for bankruptcy, an individual will need to go through a credit counseling course. Therefore, it may be a good idea to seek credit counseling voluntarily as a possible means of getting on track financially.

There are times when filing for bankruptcy may be in a debtor's best interest. For example, those who don't own a home or a car may not face negative consequences by filing. The same is true of those who are the subject of a lawsuit or don't have significant savings. Individuals who have medical bills may also benefit by filing for protection from their creditors.

For some, bankruptcy is a viable way to have a debt discharged or reorganized. By filing, an individual may be able to obtain an automatic stay of creditor collection activities. It might also be possible to retain property such as a home, car or anything else of significant value. An attorney can help a debtor understand the process of filing for bankruptcy.

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