Many people in New York City are considering bankruptcy and many more will join them when they see the amount of debt they have accumulated over the holidays. Personal debt can be a frightening thing and even more frightening is the speed at which it can get out of control. This has found many people on the receiving end of phone calls from collection agencies, many of which are simply ignored.
Relief from this can be provided by a bankruptcy filing-a filer is protected from such calls because law prohibits creditors from contacting a debtor for collection. In addition, a bankruptcy may allow a person to see the majority of their debts discharged. Though this may sound appealing, it should not be the first option that a debtor attempts.
A bankruptcy stays as a blemish on the credit report of a filer. It lasts for a considerable amount of time-a decade in some cases-and can leave a person unable to receive loans for things such as cars and homes. In light of this, a person should attempt to find help in the form of a debt management organization. Many of these exist and can be used to help a person get on the right track.
Some are geared toward specific groups of individuals-for instance, there are debt management groups that work solely with students. This may be due to the fact that student debt cannot be forgiven during a bankruptcy. Many programs use personalized debt and money management strategies to make the task of repaying debt an achievable goal. People are often intimidated by their debt and many seek for the quickest relief-while bankruptcy may provide that, debt management gives a person a chance to bring in the reins of their own financial outlook, without the long-lasting bruise on her or his financial image.
Source: Franklin Sun Journal, "UMF program helps students manage debt," Ann Bryant, Dec. 10, 2012